TMI Blog2015 (12) TMI 1026X X X X Extracts X X X X X X X X Extracts X X X X ..... on that in case the Employees Stock Option was allotted or transferred on or after 1.4.2007, the same is liable for fringe benefit tax. From the material available on record, it is not clear the date on which the Employees Stock Option was allotted or transferred. There is no reference about the date of such allotment in the assessment order also. The CIT(A), without referring to the date of the actual allotment, has proceeded on the footing that sec.115WB(1)(d) is applicable in respect of Employees Stock Option allotted or transferred on or after 1.4.2007. Therefore, this Tribunal is of the considered opinion that the date of actual allotment or transfer of Employees Stock Option is crucial for determination of the issue arises for conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arises for consideration is taxation of Employees Stock Option Plan under fringe benefit tax. 3. According to the ld. Counsel, the Employees Stock Option Plan is subjected to taxation. However, for the year under consideration, the Employees Stock Option Plan cannot be subjected to taxation. Referring to sec. 115WB(1)(a) of the Act, the ld. Counsel submitted that if the Employees Stock Option Plan falls in sec. 115WB(1)(a), then it is chargeable to fringe benefit tax for the year under consideration. However, Employees Stock Option Plan will not fall in sec. 115WB(1)(a) of the Act. According to the ld. Counsel, Employees Stock Option Plan is not a privilege, service, facility etc. The ld. Counsel submitted that the employees security op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that Sec. 115WB(1)(d) introduced by Finance Act, 2007 was applicable for the assessment year 2008-09. However, the Employees Stock Option Plan is a benefit/privilege conferred on the employees directly by the employer, therefore, before assessment year 2008-09 it would fall u/s 115WB(1)(a) of the Act. Hence, the Employees Stock Option Plan, according to the ld. DR, is liable for fringe benefit tax u/s Sec. 115WB(1)(a) of the Act for the assessment year 2007-08. 6. We have also carefully gone through the Circular No.9/2007 dated 20.12.2007 issued by the CBDT. For the purpose of convenience, we reproduce below the said Circular: In terms of the provisions of Chapter XII-H of the Income-tax Act (hereinafter referred to as Act ) an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... employers to employees within the purview of fringe benefit tax, sub-section (d) was introduced in sec. 115WB(1) of the Act by Finance Act, 2007. Therefore, the intention of the Parliament is to bring stock option within the purview of fringe benefit tax for the first time by Finance Act, 2007. Therefore, the observation of the CIT(A) that the Employees Stock Option Plan is a privilege/benefit before introduction of sec. 115WB(1)(d) may not be correct. When the CBDT clarified that with a view to bring stock options within the purview of fringe benefit tax, Finance Act, 2007 has inserted a new clause (d) in sub-section (1) of sec. 115WB of the Act, this Tribunal is of the considered opinion that the Employees Stock Option Plan cannot be brou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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