9911796707
TMI Blog2023 (4) TMI 535X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee and the Revenue preferred these appeals. For the sake of convenience, we dispose of these appeals by this common order. 2. Briefly stated relevant facts are that the assessee is engaged in the business of share/stock broking and trading in shares and securities as well as providing advisory services, its books of accounts are audited as per law and the assessee has been assessed to tax regularly. 3. During the course of scrutiny of the return of income for the assessment year 2017-18, the learned Assessing Officer disallowed the Employee Stock Option Plan (ESOP) cost claimed by the assessee as expenditure and also allowed the TDS credit for a lesser amount than was available. 4. Assessee preferred appeal before the learned CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t incurring an expenditure by issue of shares at a price lesser than Fair Market Value could qualify as an 'expenditure' under the provisions of the Act. 6. Assessee also referred to the provisions under section 17(2)(vi) of the Act and submitted that the discount/benefit enjoyed by the employee on receipt of shares under ESOP scheme at a concessional rate would constitute a revenue expenditure laid out or expended wholly or exclusively for the purpose of business of the assessee. According to the assessee by placing reliance on the decision of the Bangalore Bench of the Tribunal in the case of Biocon Limited (2013) 25 ITR(T) 602 Bangalore - Trib.) (SB) once it is established that a particular payment or benefit in kind is in the nature of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee challenged the action of the learned CIT(A) in sustaining the disallowance to the tune of 30% of the ESOP cost and also not addressing the issue of not allowing the full TDS credit by the learned Assessing Officer, whereas Revenue challenged the finding of the learned CIT(A) that the ESOP expenditure is not capital in nature difference between the market price of the shares as on the date of exercise of ESOP option by the employee and the grant price thereof, as perquisite in the hands of the employee form in part of salary. According to the Revenue, such a finding is contrary to the decision in the case of B. Durga Prasad in ITA No. 451/Viz/2016, dated 24/10/2018. Revenue further submitted that the learned CIT(A) failed to give an op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reaching such a conclusion, the learned CIT(A) should have given an opportunity to the learned Assessing Officer under Rule 46A of the Rules. 12. On a perusal of the impugned order, we are of the considered opinion that the exercise, if any, done by the learned CIT(A) in formulating the opinion that various contentions raised by the assessee to the effect that ESOP expenditure is a revenue expenditure allowable in the hands of the employer are not acceptable is not reflected on the face of the order. No reasons are forthcoming for invoking the provisions under section 17(2)(vi)(c) of the Act against the repeated contentions of the assessee that for the reasons stated in their written submissions, such an expenditure has to be allowed in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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