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TPO Misclassifies ESOP Costs as Operating Expenses; 15% Employee Discount Shouldn't Be Counted as Operating Expense.
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....TP Adjustment - ESOP considered as operating cost by the Ld.AO/TPO - TPO failed to consider the basic fact that, purchase cost of the shares of foreign AE is charged from the employees of the assessee directly and the assessee deducts TDS on the 15% discount received by such employees, who have opted for the scheme. In our view, based on the option scheme and the “Employee Information Supplement India”, the 15% discount received by such employees of the assessee cannot be treated as operating in nature. - AT....