Viswanthan Jayaraman Vs ACIT (ITAT Chennai)
Material Facts
The assessee is an Electrical Engineer employed with Hindustan Zinc Ltd. (which later merged with Sterlite Industries India Ltd, Vedanta Group). Between financial years 2011-12 and 2015-16, the assessee received shares of M/s. Vedanta Resources PLC, UK under an Employee Stock Ownership Plan (ESOP).
The shares were treated as perquisites under Section 17 of the Income-tax Act, 1961 for Assessment Years (A.Y.) 2012-13 to 2016-17, forming part of taxable salary upon which tax was deducted at source by the employer and reflected in Form 16. The perquisite amounts reflected in Form 16 were ₹9,07,157 (FY 2011-12), ₹7,76,302 (FY 2012-13), ₹32,86,815 (FY 2014-15), and ₹2,59,104 (FY 2015-16).
The shares were sold in A.Y. 2019-20, and the sale proceeds of ₹79,53,312 and ₹31,61,444 received on October 03, 2018, and October 19, 2018, respectively, were credited to the assessee’s ICICI Bank savings account. The assessee filed his return of income for A.Y. 2019-20 on August 10, 2019, paying the capital gains tax. Additionally, dividend income of ₹1,21,381 was credited to his ICICI Bank account on August 28, 2015, which had suffered withholding tax in the United Kingdom.
Procedural History
Proceedings under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (BMA) were initiated based on information received on April 03, 2019. A notice under Section 10(1) of the BMA was issued on November 11, 2019, and the assessment was completed under Section 10(3) on March 28, 2022, for A.Y. 2016-17, bringing dividend income of ₹1,43,185 to tax at 30% as undisclosed foreign income.
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