HDFC Bank Limited Vs DCIT-2(3)(1) (ITAT Mumbai)
The Income Tax Appellate Tribunal (ITAT), Mumbai, decided an appeal filed by HDFC Bank Limited against the order of the Commissioner of Income-tax (Appeals) for Assessment Year 2021-22 arising from an intimation issued by the Central Processing Centre (CPC), Bengaluru under Section 143(1) of the Income-tax Act, 1961. The dispute before the Tribunal concerned the assessee’s claim for deduction of Employee Stock Option Scheme (ESOP) expenditure under Section 37(1) of the Act.
The assessee had filed its return of income under Section 139(1), which was processed under Section 143(1), resulting in certain additions and disallowances. During the appellate proceedings before the CIT(A), the assessee raised an additional ground claiming deduction of ₹216,78,60,432 towards ESOP expenditure. The claim represented the difference between the perquisite value of ESOPs taxed in the hands of employees amounting to ₹555,20,52,345 and the fair value computed under the Black-Scholes Model amounting to ₹338,41,91,912. The assessee contended that this differential constituted business expenditure allowable under Section 37(1). It was, however, undisputed that the deduction had neither been claimed in the original return of income nor through a revised return, and no such claim had been made before the Assessing Officer.
