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TMI Blog2015 (8) TMI 319X X X X Extracts X X X X X X X X Extracts X X X X ..... count of Employee Stock Option Scheme Compensation (ESOS). 3. We have heard the rival submissions and perused the relevant material on record. At the outset, we find that similar issue came up for consideration before the Special Bench of the Tribunal in Biocon Ltd. Vs. DCIT (2013) 144 ITD 21 (Bang.) (SB). In this case, the Tribunal has held that discount on issue of ESOP is allowable as deduction in computing income under the head 'Profits and gains of business or profession.' Since it is on account of an ascertained and not contingent liability, it cannot be treated as a short capital receipt. Thereafter, the Special Bench has laid down the mechanism for determining as to when and how much deduction should be allowed. It has been held th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ible assets by observing that there was no transfer of intangible assets by Jeevan Sathi Internet Services Pvt. Ltd., and also the assessee had not satisfied the basic two conditions for the allowance of depreciation. The ld. CIT(A) reversed the assessment order on this point. 6. We have heard the rival submissions and perused the relevant material on record. It is noticed that the AO disallowed the claim of depreciation on intangible assets by following his opinion for the AY 2006-07. There is no elaborate discussion about this issue in the assessment order for the instant year. The ld. AR or the ld. DR failed to throw any light on the final view taken by the Tribunal on this issue in its order for AY 2006-07. In the absence of any discus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, natural that Rule 8D cannot be applied. 10. Now, coming to the making of any addition u/s 14A, we find that sub-section (2) provides as under:- `The Assessing Officer shall determine the amount of expenditure incurred in relation to such income which does not form part of the total income under this Act in accordance with such method as may be prescribed, if the Assessing Officer, having regard to the accounts of the assessee, is not satisfied with the correctness of the claim of the assessee in respect of such expenditure in relation to income which does not form part of the total income under this Act.' 11. A bare perusal of this provision indicates that the AO shall determine the amount of expenditure incurred in relation to exempt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 14A is not satisfied, there can be no computation of disallowance as has been held in several judgments. We find that the absence of satisfaction by the AO in the instant case has the effect of taking away the jurisdiction to make disallowance u/s 14A in this regard. We, therefore, uphold the impugned order on this legal aspect. Assessment Years 2008-09 & 2009-10 12. The Revenue has filed revised ground for the AY 2008-09 in which there is challenge to the deletion of addition of Rs. 1,89,15,284/- made on account of Employee Stock Option Scheme Compensation (ESOS). There is no other ground taken by the Revenue. In its appeal for the AY 2009-10, the only ground is against the deletion of addition of Rs. 1,29,58,000/- made on account ..... X X X X Extracts X X X X X X X X Extracts X X X X
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