Appeal allowed on taxation of Employees Stock Option Plan under fringe benefit tax for AY 2007-08.

The Tribunal allowed the appeal for statistical purposes regarding the taxation of Employees Stock Option Plan under fringe benefit tax for assessment year 2007-08. The Tribunal noted that the actual date of allotment or transfer of the stock option was crucial in determining the tax liability, as clarified by Circular No.9/2007 issued by the CBDT. Due to the lack of clarity on the allotment date in the record, the Tribunal remitted the issue back to the Assessing Officer for verification and directed a re-examination based on the actual allotment date.

---

---

Issues:
Taxation of Employees Stock Option Plan under fringe benefit tax for assessment year 2007-08.

Analysis:
The appeal was filed against the order of the Commissioner of Income-tax (Appeals) for assessment year 2007-08, with a delay of 35 days. The delay was condoned after finding sufficient cause. The main issue raised was the taxation of Employees Stock Option Plan under fringe benefit tax. The counsel for the assessee argued that the Employees Stock Option Plan should not be taxed for the year under consideration based on the provisions of sec. 115WB(1)(a) of the Act. The counsel contended that the Employees Stock Option Plan falls under sec. 115WB(1)(d) introduced by the Finance Act, 2007, and should be taxed for the assessment year 2008-09, not 2007-08.

The Departmental Representative argued that sec. 115WB(1)(d) was applicable for the assessment year 2008-09, but the Employees Stock Option Plan should be taxed under sec. 115WB(1)(a) for the assessment year 2007-08. The Tribunal considered the submissions and reviewed the provisions of sec. 115WB(1) introduced by the Finance Act, 2007. It was noted that Employees Stock Option falls under sec. 115WB(1)(d) as clarified by the Parliament. However, the Tribunal observed that the actual date of allotment or transfer of Employees Stock Option was crucial for determining the tax liability.

The Tribunal referred to Circular No.9/2007 issued by the CBDT, which clarified the applicability of sec. 115WB(1)(d) for allotments or transfers made after 1st April 2007. As the date of allotment was not clear from the record, the Tribunal set aside the lower authorities' orders and remitted the issue back to the Assessing Officer for verification of the actual allotment date. The Tribunal directed the Assessing Officer to re-examine the issue and determine the tax liability based on the date of allotment or transfer. The appeal of the assessee was allowed for statistical purposes.

---