TMI Blog2021 (8) TMI 772X X X X Extracts X X X X X X X X Extracts X X X X ..... depending on the various factors on which the assessee had no control. The expenditure in this behalf was an ascertained liability, thus the expenditure incurred being on lines of the SEBI guidelines, there could be no interference in the relief granted by the Assessing Authority for the expenditure arising on account of Employees Stock Option Plan. This expenditure incurred as per SEBI guidelines and granted by the Officer could not be considered as erroneous one calling for exercise of jurisdiction under Section 263. For Employees Stock Option Plan is concerned, as rightly pointed out by the Tribunal, the assessee had to follow SEBI direction and by following such direction, the assessee claimed the ascertained amount as liability for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed its return of income through electronic mode on 24.09.2014, declaring total income of ₹ 3,32,65,350/-. The case of the assessee company was selected for complete scrutiny under CASS. Thereafter, the Assessing Officer proceeded to frame the assessment. During the course of assessment proceedings, it was noticed by the Assessing Officer that during the period under consideration, the assessee company had debited to its P L A/c, an amount of ₹ 1,18,59,997/- on account of Employee Stock Option (ESOP) scheme . The Assessing Officer show caused the assessee company as to how this expenditure is allowable. In response thereto, the assessee filed a detailed written submissions and also relied upon certain case laws. However, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as in her decision relied on the judgement of Hon ble Delhi High Court and the relevant contents have been reproduced in the impugned order. The same is reproduced hereunder for ready-reference:- 11. As regards the second issue which is now canvassed before this Court viz., on the issue of expenditure of 66.82 lakhs towards the issue of shares to the Employees Stock Option is concerned, the Tribunal pointed out that the shares were issued to the employees only for the interest of the business of the assessee to induce employees to work in the best interest of the assessee. The allotment of shares was done by the assessee in strict compliance of SEBI regulations, which mandate that the difference between the market prices and the price ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t all that the Commissioner could do in exercise of power under Section 263 of the Act was either to enhance the assessment or modify the assessment or cancel the assessment and to give a direction for fresh assessment. Considering the words of enhancing or modifying as well as the use of word 'or' which is a disjunction thereafter, the Commissioner could only enhance or modify the assessment and it would not be possible for the Commissioner to do both this under the jurisdiction of Section 263 of the Act. The Tribunal agreed with the assessee's contention and held that the entire order stood vitiated by reason of fact that the Commissioner had not gone into the assessment in toto to set aside the order of assessment nor enhan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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