TaxTMI 
TaxTMI 
2026 (8) TMI 476
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....considering with addition nil. The Ld. AO had adopted the return income in the impugned assessment order. The Ld. PCIT by invoking provision 263 observed that the assessee had claimed expenses amount to Rs. 1,01,77,23,473/- pertains to discount on issue of shares under employee stock option plan/employees stock appreciation rights scheme to employee (ESOP/ESAR). The Ld. PCIT observed that though in A.Y. 2017-18, the Ld. Commissioner of Income Tax (Appeal) had allowed the expenses related to ESOP/ESAR but due to the monetary limitation, the revenue had not able to file the appeal u/sec. 260A. The Ld. PCIT further, noted that though the order of the Hon'ble Karnataka High Court in the case of CIT vs Biocon Ltd. reported in (2021) 430 ITR 151(Karnataka) had allowed the claim of deduction of expenses of ESOP/ESAR but the revenue had filed the SLP before the Hon'ble Supreme Court and which was duly admitted and pending before the Hon'ble Apex Court. So, relying on the above mentioned observations, the Ld. PCIT considered the impugned assessment order as erroneous and prejudicial to the interest of the revenue. The notice was issued by invoking provision of section 263 & the asse....
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....he settled law of Bangalore Special Bench of ITAT in case of Biocon Limited (25 ITR 602) in favour of the Assessee which decision has subsequently been confirmed by the Karnataka High Court in case of Commissioner of Income Tax v. Biocon Ltd (430 ITR 151) wherein Departmental appeal is dismissed. For your ready reference, we submit hereto as Exhibit-12 and Exhibit-13 the copy of judgment of ITAT Special Bench in the case of Biocon Limited (supra) and subsequent decision of Karnataka High Court affirming the view of the ITAT Special Bench. There apart, the Assessee relies on plethora of authorities which have held that Discount on ESOP to employees is a deductible expenditure u/s. 37(1) of the Act, few of which are stated hereunder jurisdictional Mumbai Bench of ITAT or jurisdictional Bombay High Court * Hon'ble Mumbai Tribunal in the case of ACIT, Circle-7(2)(2), Mumbai v. M/s Network 18 Media & Investment (I.T.A. No.7501/Mum/2018); * Hon'ble Mumbai Tribunal in the case of DCIT 2(3)(2) v. M/s Kotak Mahindra Bank v. ACIT-2(3)(2) (ITA No. 698/Mum/2016) * Recently, the Delhi High Court in the case of PVR Ltd v. Commissioner of Incom....
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....oduced below: "14. We have heard the rival submissions and perused the material available on record. The primary issue relates to the non-verification of foreign remittances amounting to Rs. 4,05,69,846/- on which TDS was allegedly not deducted by the assessee. On perusal of the record, we find that during the assessment proceedings, in compliance with the notice issued under section 142(1), the assessee had furnished complete details of the foreign remittances, along with the reasons for non-deduction of TDS and the acknowledgement numbers of Form 15CA filed under Rule 37BB. The Ld. AO, after considering the said submissions, which are duly noted in the assessment order, accepted the assessee's explanation. Thus, the core question that arises is whether this constitutes a case of "no enquiry" or merely an "inadequate enquiry." We find that the assessee had made full compliance, and the Ld. AO, upon due consideration and application of mind, accepted the explanation as proper. The impugned issue is specifically noted in the assessment order itself, reflecting that the Ld. AO had consciously applied his mind. In this regard, we draw support from the judgment of the Hon&....
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....nterests of the revenue. Accordingly, it was contended that the impugned assessment order was both erroneous and prejudicial to the interests of the revenue, warranting revision under section 263 of the Act. The Ld. DR, therefore, supported the order passed by the Ld. PCIT. The Ld. DR also invited our attention to the relevant observations contained in the revisional order passed under section 263 of the Act, which are reproduced below: "8. The submissions of the assessee have been carefully perused and considered but found to be unacceptable. The assessee company had claimed deduction for discount granted to employees on shares amounting to Rs. 101,77,23,473/- on account of issue of shares of the Holding company to the employees of assessee company. Assessee company has also claimed deduction for payment made by the assessee to holding company M/s ASK Investment Managers Ltd towards ESOP/ESAR granted by Holding company amounting to Rs. 20,59,19,000/-. In Assessee's own case for AY 2017-18, Hon'ble ITAT relying on the decision of Hon'ble Karnatka High Court in the case of Biocon Ltd upheld the decision of CIT(A) deleting addition made by the AO. Decision of the....
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....R expenditure by issuing notices under section 142(1), calling for detailed explanations, and considering the assessee's replies along with the judicial precedents relied upon. After due application of mind, the Ld. AO accepted the assessee's claim and completed the assessment without making any disallowance. Thus, this is clearly not a case of lack of enquiry or non-application of mind. It is further evident from the record that the identical issue had already been decided in favour of the assessee in its own case for A.Y. 2017-18 by the Ld. CIT(A), and the legal position as prevailing on the date of passing the assessment order was supported by the judgment of the Hon'ble Karnataka High Court in Biocon Ltd. (supra) as well as various decisions of the Coordinate Benches of the Tribunal. Merely because an SLP against the judgment of the Hon'ble Karnataka High Court has been admitted by the Hon'ble Supreme Court does not render the judgment inoperative or cease its binding persuasive value. Unless the operation of the judgment has been stayed or the judgment has been reversed by the Hon'ble Supreme Court, the legal position prevailing on the date of assessmen....