TMI Blog2022 (4) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... on plan 2009 and the amended plan, hence, we are not in a position to determine whether the vesting was in a graded manner over the period of four years or not. Therefore, in the interest of justice and equity, the matter is restored to the files of the A.O. A.O. is directed to follow the judgment of the Hon'ble jurisdictional High Court in the case of CIT v. Biocon Limited [ 2020 (11) TMI 779 - KARNATAKA HIGH COURT] - AO shall afford a reasonable opportunity of hearing to the assessee. The assessee shall cooperate with the A.O. for the expeditious disposal of the matter. - ITA No. 1354/Bang/2018 - - - Dated:- 18-3-2022 - George George K., Member (J) And Padmavathy S., Member (A) For the Appellant : Sheetal Borkar, Advocate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions/disallowances made are excessive and ought to be reduced substantially. 8. For these and other grounds of appeal may be raised at the time of hearing, the appellant prays that the appeal may be allowed. 3. The brief facts of the case are as follows: The assessee is a company, engaged in the business of online based selling of travel products and solutions. For the assessment year 2013-2014, the return of income was filed on 30.11.2013 declaring a loss of ₹ 12,86,42,391. The return was selected for scrutiny by issuance of notice u/s. 143(2) of the I.T. Act. During the course of assessment proceedings, the A.O. noticed that the assessee had debited an amount of ₹ 31,51,995 to profit and loss account towards Emp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion as issue of shares is not an 'expenditure'. The case laws relied upon by the assessee company are also found to be not squarely applicable on the facts and circumstances of the case in hand. In the light of the above discussion, and amount of ₹ 31,51,995/- is disallowed and added back to returned income. 4. Aggrieved, the assessee filed an appeal before the first appellate authority. The CIT(A) rejected the contention of the assessee by observing that for actual vesting of shares in the employee, a minimum period of four year service is required to be rendered by the employee after the date of grant of option to such employee, and therefore, it was concluded that the vesting of shares would be only beyond the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evant facts. For ready reference, the same is reproduced below:- Date of grant of option 17.04.2009 Fair value of the share at the time of grant of option ₹ 13.02 per share The price at which shares were offered to employee ₹ 11.70 per share Discount offered to the employee ₹ 1.32 per share No.of grants given to Shri Vinay Gupta under ESOP 19,52,943 Total discount offered to Shri Vinay Gupta through ESOP ₹ 25,82,389 Total vesting period for being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te. On exercise of option by an employee, the actual amount of benefit has to be determined is only a quantification of liability, which takes place at a future date. The tribunal has therefore, rightly placed reliance on decisions of the Supreme Court in Bharat Movers supra and Rotork Controls India P. Ltd., supra and has recorded a finding that discount on issue of ESOPs is not a contingent liability but is an ascertained liability. 10. From perusal of Section 37(1), which has been referred to supra, it is evident that an assessee is entitled to claim deduction under the aforesaid provision if the expenditure has been incurred. The expression 'expenditure' will also include a loss and therefore, issuance of shares at a discou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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