Biplab Adhya Vs ITO (ITAT Bangalore)
Summary: The appeal by the assessee was directed against the final assessment order dated 28.07.2022 passed under section 143(3) read with section 144C(13) of the Income-tax Act, 1961 for Assessment Year 2019-2020. The solitary issue argued before the Tribunal concerned the restriction of the cost of acquisition of shares sold by the assessee to Rs.72,27,660 as against the higher cost claimed in relation to shares allotted under an Employee Stock Option Scheme (ESOP).
The assessee, an individual employed with M/s. Wipro Limited during the relevant assessment year, filed his return as a non-resident on 22.07.2019 declaring total income of Rs.3,16,670. The return included salary income of Rs.5,803, house property income of Rs.3,77,352, capital loss of Rs.85,70,552 and income from other sources of Rs.91,262. The assessment was selected for scrutiny and notice under section 143(2) was issued on 31.03.2021. During assessment proceedings, the Assessing Officer sought details relating to the short-term capital loss claimed on sale of shares, including details of shares sold, evidence supporting the cost of acquisition and the assessee’s Demat account.
The assessee submitted that 73,235 Wipro Limited shares had been allotted under employee stock option schemes and that the options were exercised during Financial Year 2017-2018. Out of these shares, 73,200 shares were sold during the year under consideration. The assessee furnished allotment letters-cum-certificates for perquisite value and contract notes. The market value of the shares on the respective dates of exercise was considered for determining the perquisite value. After reducing the exercise price and, in the relevant calculations, the portion attributable to services rendered outside India, the net amount was treated as taxable salary under section 17(2)(vi). The perquisite value of the 73,235 shares allotted was stated to be Rs.72,27,660.
