ESOP cost is revenue, not capital: ITAT allows ₹721 Cr deduction

Intel Technology India Private Limited Vs DCIT (ITAT Bangalore) The ITAT Bangalore held that ESOP cross-charge incurred by an Indian company towards shares granted by its foreign parent to employees is a revenue expenditure allowable under section 37(1). In this case, the assessee (Intel India) claimed deduction of ₹721 crore being actual ESOP cost cross-charged by the parent company. The AO and CIT(A) treated the expenditure as capital in nature on the ground that it related to issuance of shares and increase in parent company’s capital. The Tribunal rejected this view and followed bindin...