TaxTMI 
TaxTMI 
2021 (9) TMI 1168
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....it in the form of employee performance and thus need to be capitalized? Rs. 78,54,960/- 2. The CIT(A) erred in allowing the expenditure claimed which was not actually spent by the assessee to be allowed as such. It is a notional loss which was claimed as expenditure in the current year. The same is not allowable to be debited to P & L Account. 3. The Ld. CIT(A) erred in ignoring the fact that the issue of allowability of ESOP expenditure has not reached finality and the SLP filed against the order of Hon'ble High Court of Delhi in the matter in the case of Mis. Lemon Tree Hotels Pvt. Ltd has been admitted by the Hon'ble Supreme Court. 4. Whether the CIT(A) is correct in relating the disallowances to exempt income earned duri....
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....a/c Rs. 2,31,02,825/- under the head 'employee stock compensation expenses'. In this regard the assessee was asked to submit the reply to which the assessee submitted a detailed calculation along with the value for determining the sales as well as the manuals. But the AO was not satisfied and he calculated difference on the basis of DCF method and made necessary adjustment under Rule 11 UA and accordingly he added Rs. 2,31,02,825/- and added to the total income of the assessee. Further, the AO also noticed that the assessee has made investments in equity instruments and the opening balance was Rs. 15,13,85,989/- and as on the end of the balance sheet there was a closing balance of Rs. 11,77,57,652/-. After observing he applied Rule ....
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....s. 2,31,02,825/- as ESOP expenses which were disallowed by the Assessing Officer. The appellant stated that the expenses have been claimed as per ICAI guidelines and also SEBI has given the mandate for the payment of the same as per their rules. In view of the same, the expenses should be allowed. The appellant relied on the decision of Hon'ble ITAT in the case of Mindspeed Technologies vs. ACIT which relied on the special Bench decision of Bengaluru Bench of Tribunal in the case of Biocon Limited vs. ACIT. The Assessing Officer relied on the decision of Ranbaxy Laboratories vs. Addl. CIT dated 12.06.2009 of the Hon'ble ITAT Delhi and the decision of Mumbai Bench of Hon'ble ITAT in the case of VIP Industries vs. DCIT. The Asse....
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.... it was held that it is an allowable deduction. Therefore, so far as the issue of allowability of the deduction is concerned it has been decided in favour of the assessee by this tribunal by following the decision of the Special Date of Judgment 16-8-2018, ITA No. 241/2017 The Pr. Commissioner of Income Tax - 7 & Anr. Vs. The Hon'ble High Court of Delhi in ITA 107/2015 in the case of CIT vs. Lemon Tree Hotels Ltd. vide order dated 18.08.2015 has adjudicated as under: "2. The question sought to be projected by the Revenue is whether the ITAT erred in deleting the addition of Rs. 1,28,19,169/- made by the Assessing Officer ('AO') by way of disallowance of the expenses debited as cost of Employees Stock Option ('ESOP') ....
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....basis of market value of Rs. 505 and has charged the employees Rs. 100 (face value being Rs. 10 and security premium Rs. 90). The difference has been considered as an expense and the relevant perquisite has been accounted for in the hands of employees and the same have been taxed in their hands and due TDS has been deducted by the appellant. The Assessing Officer however has taken the value as per book value by considering the value around Rs. 335/- and the Assessing Officer has commented that the valuation taken at Rs. 505/- is very high. The appellant has followed the DCF method and no fault has been found in the same by the Assessing Officer with regard to the parameters considered for the said valuation and the AO simply brushed aside....
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.... not have any exempt dividend income and therefore the disallowance ix], 14A is not called for. There is a jurisdictional ITAT decision in the situation, wherein the disallowance u/s. 14A cannot be made if the appellant has not earned any exempt income. The extract of the decision in the case of DCIT Vs. Maheshwari Mega Ventures Limited, Hyderabad in ITA No. 367/Hyd/2013 dated 03.02.2017 is reproduced as below: "22. Considered the rival submissions and perused the material facts on record. As per the P & L account and balance sheet submitted before us, the assessee had not earned any exempt income. The provisions of section 14A will be applied to find the expenditure relating to exempt income. In the absence of such exempt income, no expe....