TaxTMI 
TaxTMI 
2024 (6) TMI 100
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....nd in law in deleting the addition amounting to Rs. 3,77,40,366/- being expenses incurred on Employee Stock Option (ESOP) scheme whereas the assessing officer has categorically held in the order that such expenses are notional and contingent in nature and are not allowable." 3. Briefly stated, the facts of the case are that the assessee is a private limited company engaged in the business of providing services in the area of real estate related consultancy, site management, professional advisory, project management. For the year under consideration, the assessee filed its return of income on 30.11.2018 declaring total income of Rs. 2,15,08,30,700/-. 4. The Assessing Officer in the course of scrutiny assessment sought justification for....
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....e submitted that the supporting invoices from assessee's parent entity were also placed on record before the Assessing Officer to substantiate that the expenses were actually incurred by the assessee. However, the Assessing Officer disallowed the aforesaid claim of ESOP alleging inter-alia that the expenses are notional and contingent in nature. 9. The ld counsel of the assessee, further argued that the parent entity, CBRE Inc. recharges the ESOP expense to the assessee based on the market prices prevailing on exercise date of grant of shares actually exercised during the current year by employees of assessee. He submitted that the ESOP amount is not notional or contingent as it was determined and actually paid during the year and th....
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....has disallowed the expenditure u/s 37(1) of the Income Tax Act on two counts viz, expenditure had not crystallized and expenditure was not capital in nature. In regard to the former the appellant contended that the expenditure had been actually incurred by the appellant company and cross charges in this regard had been paid to the parent company .... 10. We have heard the rival submissions and perused the material available on record. The issue in the present ground is with respect to the allowability of expenses towards ESOP expenses. AO had disallowed the expenditure by holding it to be capital in nature and not allowable u/s 37(1) of the Act. We find that CIT(A) after considering the various High Court's and Tribunal's d....
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....ssessee by holding that the cost of ESOP could be debited to the profit and loss account of the Assessee. This Court has also in its decision dated 4th August 2015 in ITA No.2 of 2002 (CIT v. Oswal Agro Mills Ltd.) held that the expenditure incurred in connection with issue of debentures or obtaining loan should be considered as revenue expenditure. 4. In the circumstances, the impugned order of the ITAT answering the question in favour of the Assessee is affirmed." 13. The Hon'ble Karnataka High Court in the case of CIT Vs. Biocon Ltd [supra] has held as under: "10. From perusal of Section 37(1), which has been referred to supra, it is evident that an assessee is entitled to claim deduction under the aforesaid provision if ....