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TMI Blog2021 (8) TMI 561X X X X Extracts X X X X X X X X Extracts X X X X ..... als that there was no appearance in the past from the assessee's side. In such a situation, we proceed to dispose of the appeal ex parte qua the assessee after considering the material on record and after hearing by the Learned DR. 3. The relevant facts as culled from the material on records are as under : 4. Assessee is a company which stated to be engaged in the business of credit rating. Assessee filed its return of income for A.Y. 2014-15 on 29.11.2014 declaring total income of Rs. 67,32,94,360/- which was subsequently revised on 31.03.2016 by declaring an income of Rs. 67,69,56,180/-. The case was selected for scrutiny and thereafter assessment was framed u/s 143(3) of the Act vide order dated 21.12.2016 and the total income was dete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowance of Employee Stock Option Scheme Compensation. 6. During the course of assessment proceedings, AO noticed that assessee has claimed Rs. 1,46,46,000/- in its P&L account towards Amortization of deferred employees compensation (Employee Stock Option Scheme Compensation). Assessee was asked to justify its claim of expenses to which the submissions were made. The submissions of the assessee was not found acceptable to AO. AO was of the view that the expenditure on ESOP compensation was not revenue expenditure as it has been incurred towards the raising of share capital, it is not an actual expenditure but just a notional loss, SEBI guidelines are not a prerogative for determining allowability or otherwise of an item for income tax purpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owance u/s 14A r.w.r 8D of the Act. 10. During the course of assessment proceedings, AO noted that assessee had claimed exempt income of Rs. 16,10,000/- and suo moto disallowed Rs. 1,81,956/- u/s 14A being related to the earning of the exempted income. Assessee was asked to explained as to why the disallowance not be made u/s 14A r.w.r 8D of the Act to which assessee made submissions which were not found acceptable to AO. The AO thereafter by following the methodology prescribed u/r 8D computed disallowance at Rs. 1,61,25,177/- and after giving the credit the suo moto disallowance of Rs. 1,81,956/- made by the assessee, made a net disallowance of Rs. 1,59,43,221/-. Aggrieved by the order of AO, assessee carried the matter before the CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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