TaxTMI 
TaxTMI 
2018 (3) TMI 1957
X X X X Extracts X X X X
X X X X Extracts X X X X
....692/- in respect of Employee Stock Option Plan ('ESOP') scheme, holding that the issue is covered against the Appellant by the order in Dy. CIT v. Ranbaxy Laboratories Ltd. (2009) 124 TTJ (Del) 771. 1.1 That on the facts and the circumstances of the case and in law, the CIT(A) has erred in not following the order of Special Bench in Biocon Ltd. v. Dy. CIT(LTU) [2013] 155 TTJ (Bang-SB) 649, wherein, ITAT order in Ranbaxy Laboratories Ltd. (supra) was duly considered and distinguished. 1.2 That on the facts and the circumstances of the case and in law, the CIT(A) has erred in holding that neither any expenditure was incurred nor is there any specific provision to allow deduction of expenditure on ESOP scheme. 2. That on the facts and the circumstances of the case and in law, the CIT(A) has erred in not allowing deduction of INR 20,00,000/- being the non refundable deposit paid to Indian Railway Catering and Tourism Corporation Ltd. (IRCTC), for the purpose of business of the Appellant. 2.1 That on the facts and the circumstances of the case and in law, the CIT(A) did not appreciate that expenditure by way of non refundable deposit to IRCTC did not provide any enduring benefit....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... is covered against the Appellant by the order in Dy. CIT v. Ranbaxy Laboratories Ltd. (2009) 124 TTJ (Del) 771. 1.1 That on the facts and the circumstances of the case and in law, the CIT(A) has erred in not following the order of Special Bench in Biocon Ltd. v. Dy. CIT(LTU) [2013] 155 TTJ (Bang-SB) 649, wherein, ITAT order in Ranbaxy Laboratories Ltd. (supra) was duly considered and distinguished. 1.2 That on the facts and the circumstances of the case and in law, the CIT(A) has erred in holding that neither any expenditure was incurred nor is there any specific provision to allow deduction of expenditure on ESOP scheme. 2. That on the facts and the circumstances of the case and in law, the CIT(A) having treated non refundable deposit of INR 20,00,000/- paid to Indian Railway Catering & Tourism Corporation Ltd. as intangible asset u/s 32(1)(ii) and allowing depreciation in the assessment year 2008-09, ought to have directed the Assessing Officer to allow depreciation in the assessment year in question, more so because the appeals for the assessment years 2008-09, 2009-10 and 2010-11 were disposed of on the same day i.e. 9.3.2015. 2.1 That on the facts and the circumstance....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t the appellant, I hold that the AO was fully justified in making disallowance of Rs. 2,33,11,692/- on account of ESOP. I therefore, confirm the addition on account of the disallowance made by the AO. The ground of appeal is ruled against the appellant." 6. The ld. counsel for the assessee submitted that the Ld. CIT(A) in deciding the issue against the assessee did not take any cognizance of the decision of Special Bench in Biocon Ltd (supra). It was submitted that the decisions in M/s. VIP Industries Ltd. (supra) and Ranbaxy Laboratories Ltd. (supra) were duly considered by the Special Bench but the reasons recorded therein did not find favour with the Special Bench. 7. It was further submitted that the issue is covered by decisions of Hon'ble Delhi High Court in CIT v. Lemon Tree Hotels Ltd. (ITA No.107/2015 dated 18.8.2015) and Pr. CIT v. Indiamart Intelmesh Ltd. (ITA No.80/2018 dated 24.1.2018). 8. The ld. DR on the other hand relied upon the order of the ld. CIT(A) and the order of the Assessing Officer. 9. We have heard the rival submissions and have perused the record and various orders on which reliance was placed and are of the view that the case is squarely covered by....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e securities contracts (Regulation) Act, 1956 (42 of 1956) and, where employees‟ stock option has been granted under any plan or scheme thereof, includes the securities offered under such plan or scheme. Thus it is discernible from the above provisions of the Act that the legislature itself contemplates the discount on premium under ESOP as a benefit provides by the employer to its employees during the course of service. If the legislature considers such discounted premium to the employees as a fringe benefit or "any consideration for employment‟. It not open to argue contrary. Once it is held as a consideration for employment, the natural corollary which follows is that such discount i) is an expenditure ii) such expenditure is on account of an ascertained (not contingent) liability; iii) it cannot be treated as a short capital receipt. In view of the foregoing discussion, we are of the considered opinion that discount on shares under the ESOP is an allowable deduction. ............................................... 10.8 Reverting to the questions of "when‟ and "how much‟ of deduction for discount on options is to be granted, we hold that the liability....