TaxTMI 
TaxTMI 
TaxTMI 
2018 (12) TMI 1724
X X X X Extracts X X X X
X X X X Extracts X X X X
....or the Assessment Year 2013-14. 2. The adjournment petition preferred by the ld AR was rejected as the issues involved in this appeal are already covered by various decisions of Special Benches of Tribunal and Hon'ble Supreme Court. Accordingly, we proceed to hear this appeal on hearing the ld DR and based on materials available on record. 3. The first issue to be decided in this appeal is as to whether the ld CITA was justified in granting relief to the assessee in the sum of Rs. 33, 18, 575/- u/s 14A of the Act read with Rule 8D of the Rules in the computation of book profits u/s 115JB of the Act. 3.1. The ld AO observed that the assessee had non-current non-taxable investments having opening value of Rs. 3332.05lakhs and closing va....
X X X X Extracts X X X X
X X X X Extracts X X X X
....) is disallowed and added back to the total income of the asseseee. 3.2. The ld CITA deleted the disallowance u/s 14A of the Act read with Rule 8D of the Income Tax Rules under normal provisions of the Act as well as in the computation of book profits u/s 115JB of the Act. Aggrieved, the revenue had preferred an appeal before us only on the aspect of disallowance u/s 14A of the Act read with Rule 8D of the Rules in the computation of book profits u/s 115JB of the Act alone. 3.3. We have heard the ld DR. We note that the Special Bench of ITAT Delhi Bench in ACIT vs Vireet Investment (P) Ltd (2017) 82 taxmann.com 415 (Delhi.Trib.)(SB) has held as under:- "6.22. In view of above discussion, we answer the question referred to us in favou....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ervices to the company. The ESOP expense of Rs. 23.98 lakhs have not been reflected in the books and is not an allowable expense under the provisions of the Act. Accordingly, an amount of Rs. 23.98 lakhs is disallowed and added back to the total Income of the assessee. 4.2. The assessee argued that the expenditure incurred towards ESOP is an allowable expenditure. Without prejudice to the same, the assessee submitted that ESOP is a scheme under which the Directors, Officers and Employees receive a right to purchase securities or shares of the company at a pre-determined price, lower than the market value. The ESOP discount is a taxable perquisite to the employee at the time of exercise of option, and its valuation is to be done by conside....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ight of the actual discount on the basis of the market price of the shares at the time of exercise of options. Thus it was pleaded that the said expenditure incurred by the assessee is an extra allowance by the assessee to its employees, which is the difference in the amount of discount calculated with reference to the market price at the time of grant of option and the market price at the time of exercise of option and hence cannot be reflected in the books of account. Further it is to be noted that the additional allowance of Rs. 23, 98, 000/- is a taxable perquisite in the hands of the employees, and tax was accordingly deducted on it and hence has been duly offered to tax by the employees. 4.3. The ld CITA placed reliance on the Speci....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of MTM loss on derivatives. Herein the assessee has not furnished any detail of the underlying assets, meaning thereby whether the transaction is related to the business or not. In the absence of the details of transactions it cannot be denied that the transaction can be related to the business of the aseeesee. AS-11 deals with giving of accounting treatment for the effects of changes in foreign exchange rates. In case of the revenue items falling under section 37(1), para 9 of AS-11, which deals with recognition of exchange differences, needs to be considered. Under this para, exchange differences arising on foreign currency transactions have to be recognized as income or as expense in the period in which they arise. The important point t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gains as per nationally accepted Accounting Standards; (vi ) whether the system adopted by the assessee is fair and reasonable or is adopted only with a view to reduce the incidence of taxation. In view of the above, deduction of Rs. 2, 83, 30, 000/- claimed by the assessee in its computation of income is disallowed and added back to the total income of the assessee. 5.2. The ld CITA deleted the addition by observing as under:- "I have carefully considered the facts of the case, assessment order, the remand report and the other material brought on record. The assessing officer had disallowed an amount of Rs. 283.30 lacs shown as negative figure under note 24 as finance cost arriving out of derivative transactions. The reason given for.....