TaxTMI 
TaxTMI 
2023 (1) TMI 1067
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....st of acquisition in respect of shares sold to Rs.72,27,660 as compared to the amount of Rs.2,13,73,864 claimed by the assessee. 3. The brief facts of the case are as follows: The assessee is an individual, who was employed with M/s.Wipro Limited during the relevant assessment year. For the assessment year 2019-2020, the return of income was filed in the capacity of "non-resident" on 22.07.2019 declaring total income of Rs.3,16,670. The total income comprised of (a) income from salary of Rs.5,803, (b) income from house property Rs.3,77,352, (c) loss under the head capital gains of Rs.85,70,552 and (d) income from other sources of Rs.91,262. The assessment was selected for scrutiny and notice dated 31.03.2021 was issued u/s 143(2) of t....
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....was reduced. The net value post such reduction was treated as perquisite value for the shares allotted and accordingly treated as taxable salary in accordance with section 17(2)(vi) of the I.T.Act. The total amount of taxable perquisite value in respect of 73,235 shares allotted amounted to Rs.72,27,660. The assessee also submitted that the calculation of capital gains in respect of the said transaction in respect to the aforesaid show cause notice. In the said calculation, the market price on the date of exercise for calculating perquisite as appearing in the allotment certificate was adopted as "cost of acquisition", which according to the assessee, was as per section 49(2AA) of the I.T.Act. Therefore, the total cost of acquisition claime....
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....on 49(2AA) read with section 17(2)(vi), the cost of acquisition of shares granted under Employee Stock Option scheme shall be the fair market value which has been computed as per rule 3(8) and taken into account for the purposes of section 17(2)(vi); (iii) Considering the `perquisite value' computed under section 17(2)(vi) even though section 49(2AA) specifically refers to the `fair market value' taken into account for the purposes of section 17(2)(vi) (iv) Not appreciating that, the assessee is entitled to claim the entire fair market value as computed as per rule 3(8) which is taken into account for the purposes of section 17(2)(vi), as cost of acquisition of shares sold; (v) Not appreciating that, the expressio....
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....assessee has exercised his ESOP option during the F.Y. 2017-18; (ii) since the market value of the shares exercised by the assessee is more than the exercise value, the difference amount should have been offered by the assessee as perquisites in the return, which the assessee has failed to do. 2.4.4 The AO restricted the cost of acquisition to Rs.72,27,660/- being the perquisite value as against Rs.2,12,27,464/- claimed by the assessee. 2.4.5 The assessee has objected to the proposed addition. He has submitted as under: (i) The cost of acquisition of the shares were determined in accordance with section 49(2AA) r.w.s. 17(2)(vi); (ii) The perquisites were offered partly to tax in India and partly ....
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....,13,73,563/-. If found to be in order, while computing the capital gains in respect to transition of shares sold by the assessee." 7. Pursuant to the DRP's directions, the final assessment order was passed wherein the cost of acquisition of the said shares was adopted at Rs.72,27,660 instead of Rs.2,13,73,864 claimed by the assessee solely for the reason that the assessee had not produced Tax Residency Certificate (TRC) as directed by the DRP. The relevant finding of the A.O. in the final assessment order in this regard reads as follows:- "B: With regard to the cost of acquisition of shares of M/s Wipro Limited amounting to Rs.1,41,45,894/- claimed by the assessee, the Hon'ble DRP directed the undersigned to obtain and verify th....
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....18-2019). The DRP has noticed the above fact in para 2.4.6 of its directions dated 29.06.2022. The DRP further directed the A.O. to verify the taxes paid with reference to the TRC and adopt the cost of acquisition of Rs,2,13,73,563. The A.O. in the final assessment order had again adopted the cost at Rs.72,27,660 instead of Rs.2,13,73,864 solely for the reason that the assessee has not produced TRC. The learned AR though had contended that the TRC is not required for determining the cost of acquisition as per the terms of section 49(2AA) of the I.T.Act, as a matter of abundant caution, the assessee had produced the TRC before the Tribunal. In the instant case, since, the assessee had produced the TRC as per the directions of the DRP, we ref....