TaxTMI 
TaxTMI 
2022 (4) TMI 24
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....er which he did. 2. The learned CIT(A) erred in disallowing employees stock option expenses incurred for the benefit of the employees including directors without proper appreciating the explanation of the Appellant. 3. The learned CIT(A) erred in not following various decision relied by the Appellant. 4. The learned CIT(A) ought to have appreciated that the Appellant had to follow SEBI directions, which is statutory body with regard to employees stock option and accordingly claimed the same as ascertain liabilities for deduction. 5. The learned CIT(A) further ought to have appreciated that the shares were issued to the employees only for the interest of business of the Appellant to induce employees to wor....
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....07 held that the shares are allotted to the employees from the share capital of the company, hence, no deduction is allowable in computing the taxable income of the assessee as there is no expenditure has been incurred. In view of the past years disallowance, the A.O. directed the assessee to explain why ESOP expenses should not be disallowed for the relevant assessment year also. The assessee filed objections, which is reproduced at para 3 of the assessment order. The A.O., however, rejected the contentions of the assessee by observing as under:- "1. The CBDT had clarified in circular No. 9/2007 dated 20/12/2007, FAQ No. 16 that if the shares are allotted to the employees from the share capital of the company, no deduction is allo....
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....(A)] 5. Aggrieved by the order of the CIT(A), the assessee has filed this appeal before the Tribunal. The assessee has filed a paper book comprising of 19 pages enclosing therein the financial statement of the assessee for the relevant assessment year, the case laws relied, etc. The learned AR reiterated the submissions made before the Income Tax Authorities. 6. The learned Departmental Representative supported the order of the A.O. and the CIT(A). 7. We have heard rival submissions and perused the material on record. The Special Bench of the Bangalore Tribunal in the case of Biocon Limited v. DCIT reported in (2013) 35 taxmann.com 355 (Bangalore) (SB) had held that discount on share under the ESOP is an allowable deduction. It was....
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.... Raja Employees Stock Option Plan 2013" (ESOP). The Hon'ble High Court in the case of CIT v. Biocon Limited (supra) had held that deduction of discount on ESOP is to be spread over the vesting period in accordance with the accounting in the books of account. The relevant finding of the Hon'ble jurisdictional High Court in the case of CIT v. Biocon Limited (supra) reads as follow:- "9. In the instant case, the ESOPs vest in an employee over a period of four years i.e., at the rate of 25%, which means at the end of first year, the employee has a definite right to 25% of the shares and the assessee is bound to allow the vesting of 25% of the options. It is well settled in law that if a business liability has arisen in the acco....