2019 (12) TMI 1696

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....issioner of Income-tax, Circle - 7(1)(1), Mumbai ('AO') dated 25 October 2019, under section 143(3) read with section 144C(13) of the Act, in pursuance of the directions issued by Dispute Resolution Panel - I (WZ) ('DRP'), Mumbai, the Appellant respectfully submits that the learned AO erred in passing the order on the following grounds: 1. In disallowing the amortization cost in respect of employee stock option plans (ESOP) granted to its employees [hereinafter collectively referred as 'ESOP cost'] amounting to Rs. 515,704,042 (including mark to market fluctuations amounting to Rs 144,737,733) incurred by the Appellant, on the basis that the ESOP costs are notional/ contingent in nature. In disregarding th....

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....es Stock Option Plan (ESOP) Cost Rs. 4,63,86,036/- and also made disallowance of Stock Exchange settlement cost Rs. 7,15,663/- paid towards noncompliance of clearing house trades, client code modification, etc. Aggrieved against the additions, the assessee filed objections before the DRP. The DRP vide direction dated 17/09/2019 rejected both the aforesaid objections of the assessee, hence, the present appeal by the assessee. 4. Shri Madhur Agrawal appearing on behalf of the assessee submitted that both the issues raised in the present appeal by the assessee are identical to the one already adjudicated by the Tribunal in assessee's own case in assessment year 2009-10 in ITA No. 222/Mum/2014 decided on 30/11/2015 and for asses....

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....t of ESOP Cost. Similar addition was made in assessee's own case in assessment year 2009-10. The Tribunal deleted the addition by observing as under:- "12. Ground No. 5 & 6 relate to the grievance related to ESOP cost. 12.1. The AO has considered this issue at para-6 of his order. While scrutinizing the return of income, the AO found that the employee costs include the cost of restrictive stock unit and stock option's plant under the Goldman Sachs Group Inc. amended and Restated Stock Incentive Plan, which is being charged to the profit and loss accounts over the period of vesting. The assessee was asked to submit the copies of the said agreement and the details of such expenditure. The assessee filed a detailed reply dated 18.2.2....

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....code modification, etc. We have observed that similar payments were made by the assessee in assessment year 2009-10. The payment made to Stock Exchange were disallowed by the Department. The Tribunal after placing reliance on the decision of CIT vs. Angel Capital & Debit Market Ltd. (supra) deleted the addition. For the sake of completeness, relevant findings of the Tribunal on this issue are reproduced below:- "13. Ground No. 7 relates to the disallowance of charges paid to National Securities Clearing Corporation Ltd, Bombay Stock Exchange and National Stock Exchange. 13.1. This issue has been considered by the AO at para-7 of his order. While scrutinizing the return of income, the AO found that the assessee has paid Rs. 22....