| COURT: | Delhi High Court |
| CORAM: | S. Muralidhar J, Vibhu Bakhru J |
| SECTION(S): | 37(1) |
| GENRE: | Domestic Tax |
| CATCH WORDS: | business expenditure, ESOP |
| COUNSEL: | Ved Jain |
| DATE: | August 18, 2015 (Date of pronouncement) |
| DATE: | November 18, 2015 (Date of publication) |
| AY: | 2008-09 |
| FILE: | Click here to download the file in pdf format |
| CITATION: | |
| S. 37(1): Cost of Employees Stock Option (ESOP) debited to P&L A/c is allowable business expenditure | |
The question sought to be projected by the Revenue is whether the ITAT erred in deleting the addition of Rs. 1,28,19,169/- made by the Assessing Officer (‘AO’) by way of disallowance of the expenses debited as cost of Employees Stock Option (‘ESOP’) in profit and loss account? The Court has been shown a copy of the decision dated 19th June 2012 passed by the Division Bench of Madras High Court in CIT-III Chennai v. PVP Ventures Ltd. (TC(A) No. 1023 of 2005) where a similar question was answered in favour of the Assessee 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. In the circumstances, the impugned order of the ITAT answering the question in favour of the Assessee is affirmed.
It is a pity that the AOs were not aware of the valid commentaries on Incometax where such issues were dealt with in detail. The CBDT does not bother to enrich the knowledge of the AOs with the supply of one set of commentaries for each range. May God bless us with enriched knowledge to CBDT.
Departmental officials have “no regret” since the have no accountability of performance and on offering equity and justice.
Yes it is true. But the CBDT is targeting the officers under it for all its follies. It may not be out of place to state that the CBDT had initiated disciplinary proceedings where an officer had no role in the proceedings before High Court – all that to be accounted for by the Commissioner and Sr. Standing Counsel. In another case the CBDT had initiated disciplinary proceedings where the officer had given given effect to the waiver of interest orders simply stating that there were no such waiver orders but the IO had procured such waiver files and placed before the CBDT.
The assessment year is 2008-09. There are superior officers whose duty is to ensure that the laws are administered judicially.For this very reason the board has conferred the powers to the JCIT/ADDL JCIT to be assessing officers and they are paid high for this supervisory role What is the contribution of such highly paid officers in an assessment, The recent investigation by the CBI had unveiled the modus operandi of the higher officers Oral directions and collect money by threatening.No recorded direction to pin down the indirect instructions where the assessee is driven to the higher authority for appropriate instructions which are encashed In all cases of survey the higher authorities are driving the assessing officers to direct the assessee to the JCIT or CIT.and now to the CCIT A reaction similar to the French Revolution is necessary to cleanse the department. In this case too it is a clear case of high handed behaviour of the authorities concerned very easy to fix responsibility.Lets see how far Modi’s dhikat works. The Chairperson bent doubly back wards to ensure that a committee is formed to look into high pitched assessments . An indication is seen in the seventh pay commission report.
Every one experience with assessments and appeals at IT department realise the fact that the officers are not tax payer friendly, since the excuses available under law and practicality , offers insulation to the team in department. The revolution should be on mind set, which presently suffers from suspicions and success of the assessing officer in gruelling an assessee. Take case of Section 68, law is harsh against Black money holders, but even a regular assessee is also dragged to level of litigation, it becomes dreadful issue to borrow in times of need. Hence :REVOLUTION appears to be a myth.
High picthed assessments are good and easy fodderfor all to make hay whle the Sun shines.All create an aura of intelligent thinking where none of that is needed.All want to be a part of a new line of thinking which is quixotic in nature
this is perhaps termed as hypocrisy of democracy