Assessee, an ex-employee of a company, FIPL which was wholly owned subsidiary of Flipkart (FPS), was granted certain stock options by FPS under Employee Stock Option Plan  (ESOP). Thereafter, FPS announced disinvestment of its wholly owned subsidiary. Pursuant to said disinvestment value of stock options fell.  Assessee received compensation towards loss in value of options. Assessee filed an application under section 197 seeking ‘Nil’ deduction at source certificate on deduction of TDS on said compensation by FPS.  Assessing Officer rejected said application on ground that amount received was linked to ESOPs and would be in nature of perquisite under section 17(2)(vi). The Assessing Officer rejected the application under section 197 of the Act. On writ allowing the petition the court held that   the  assessee had not exercised his vested right with respect to stock option under ESOP. Since stock options were merely held by assessee and same had not been exercised till date, same would not constitute income chargeable to tax in hands of assessee as none of contingencies specified in section 17(2)(vi) had occurred. On facts  since payment in question was not linked to employment, rather it was a onetime voluntary payment to all option holders of ESOP, compensation would not tantamount to perquisite under section 17(2)(vi) of the Act.  (AY. 2023-24)