2019 (1) TMI 1362

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....dent.   P.C.: 1. Appeal is admitted for consideration of following substantial question of law: "Whether on the facts and circumstance of the case and in law, the Income Tax Appellate Tribunal is correct in holding that the action of the AO in not providing the benefit of section 112 read with section 164 of the Income Tax Act, 1961 to the assessee with regard to the income assessabl....

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.... equity shares of the company and to administer the fund as instructed by the Compensation Committee for the benefit of the eligible employees. The Committee would recommend granting of options to the eligible employees. Such options would include a right to choose Employees Stock Option Scheme. The Assessing Officer noted that during the year under consideration several employees had exercised su....

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....onding revenue generated upon the eligible employees opting for such stock options, would be sufficient to hold that the proceeds cannot be treated as the Trust's business income. The Tribunal made following observations: "5.13 Thus, perusal of all the factual material placed before us, reveals that the assessee trust has been holding the shares in the fiduciary capacity. It could also be s....

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....nsaction of the assessee trust are unlike that of a trader and are more like that of an investor. The assessee trust is not free or authorized to sell the shares, held by it on behalf of the settler company, to any person in the free market at fair market price. Under such circumstances, the assessee trust is not in a position to earn maximum profits. Thus, it could be safely said that certainl....