TMI Blog2023 (12) TMI 1123X X X X Extracts X X X X X X X X Extracts X X X X ..... tels [ 2015 (11) TMI 404 - DELHI HIGH COURT] similar question was answered in favour of the Assessee by holding that the cost of ESOP could be debited to the profit and loss account of the Assessee. This Court has also in its decision in Oswal Agro Mills Ltd.[ 2015 (11) TMI 301 - DELHI HIGH COURT] held that the expenditure incurred in connection with issue of debentures or obtaining loan should be considered as revenue expenditure. Decided in favour of assessee. Disallowance u/s 40a(ia) - non deduction of TDS on reimbursement of circuit expenses - During the course of scrutiny assessment proceedings, AO noticed that the assessee has reimbursed to Ameriprise Financial Services Inc [AFSI] on behalf of the assessee but assessee has not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edhir, Adv For the Department : Shri Kanv Bali, Sr. DR ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER:- This appeal by the Revenue is preferred against the order of the ld. CIT(A) 32 dated 30.10.2017, pertaining to A.Y. 2012-13. 2. The grievances of the Revenue read as under: 1. The Ld. CIT(A) has erred on facts and in law in deleting the disallowance of Rs. 34,93,954/- made by the AO on account of Employee stock option Plan (ESOP) expenses. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the disallowance of Rs. 1,40,45,473/- made by the AO u/s 40(a) (ia) of the Income-tax Act, 1961 on account of non-deduction of TDS on reimbursement of circuit expenses. 3. On the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, 1961 [the Act, for short] and the only section under which the said claim can be made is section 37 of the Act. But, according to the Assessing Officer, even u/s 37 of the Act, claim of ESOP expenses cannot be allowed and added the same. 8. The claim was reiterated before the ld. CIT(A) and the ld. CIT(A) was convinced with the claim and allowed the expenditure. 9. Before us, the ld. DR placed strong reliance on the assessment order. 10. Per contra, ld. counsel for the assessee reiterated what has been stated before the lower authorities. It is the say of the ld. counsel for the assessee that now this issue is no more res integra as the same has been decided by the Hon'ble Jurisdictional High Court of Delhi in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer u/s 40a(ia) of the Act on account of non deduction of TDS on reimbursement of circuit expenses. 12. During the course of scrutiny assessment proceedings, the Assessing Officer noticed that the assessee has reimbursed Rs. 1,40,45,473/- to Ameriprise Financial Services Inc [AFSI] on behalf of the assessee. The Assessing Officer noticed that the assessee has not deducted tax at source for which the assessee was asked to justify. 13. The assessee, in its reply, explained that it has only reimbursed the impugned amount to its associate in USA towards circuit expenses incurred by it on behalf of the assessee. It was explained that such expenses have been incurred on telecommunication services rendered by the service provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee is towards circuit expenses to which provisions of section 40a(ia) do not apply. We, therefore, decline to interfere with the findings of the ld. CIT(A). Ground No. 2 is also dismissed. 21. Ground No. 3 relates to the deletion of disallowance of Rs. 21,78,564/- made by the Assessing Officer on account of employees contribution to the Provident Fund deposited beyond the due date. This issue is now well settled by the Hon'ble Supreme Court in favour of the Revenue and against the assessee in the case of Checkmate Services 448 ITR 518. 22. Respectfully following the same, the findings of the ld. CIT(A) are reversed. Addition is sustained. Ground No. 3 is allowed. 23. Ground No. 4 relates to the deletion of disallowance of R ..... X X X X Extracts X X X X X X X X Extracts X X X X
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