HDFC Bank Ltd Vs DCIT (ITAT Mumbai)
ITAT Mumbai held that the ESOP expenses claimed by the assessee is an allowable expenditure under section 37(1) of the Income Tax Act.
Facts- Issue involved here is that assessee for the first time made the claim before the CIT(A) with regard to ESOP expense. However, CIT(A) did not allow the claim of assessee following the decision of the Supreme Court in the case of Goetz (India) Ltd. vs. CIT (2006) 284 ITR 323 (SC). The CIT(A) also did not accept the submission of the assessee that the issue is covered by the decision of the Hon’ble Karnataka High Court in the case of CIT Vs. Biocon Ltd. (2020) 430 IR 151 (Kar. HC).
Conclusion- Based on jurisdictional High Court’s judgement in the case of Pruthvi Brokers and Shareholders it is held that the CIT(A) is not correct in not admitting the claim of the assessee with regard to ESOP expenses.
Further, based on Hon’ble Karnataka High Court judgement in the case of Biocon Ltd. it is held that the ESOP expenses claimed by the assessee an allowable expenditure under section 37(1) of the Act.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
These cross appeals by the assessee and the Revenue are against the separate orders of the Commissioner of Income Tax/National Faceless Appeal Centre [in short ‘the CIT(A)’] all dated 27.03.2023 for the Assessment Years (AY) 2016-17, 2017-18 and 2018-19. The issues contended in all these appeals are identical and therefore, these appeals are heard together and disposed of through this common order. The issues against which the assessee and the Revenue have raised grounds are tabulated as under:
Assessee’s Appeal
