Axis Bank Ltd Vs ACIT (ITAT Ahmedabad)
ITAT Ahmedabad held that disallowance of interest under section 14A unjustified as assessee’s own funds are far in excess of the investments made in funds yielding exempt income.
Facts- The assessee company filed its return of income for A.Y. 2010-11 on 07.09.2010 declaring a total income at Rs. 43,15,45,21,002/-. The first assessment order u/s. 143(3) of the Act was passed on 26.02.2013 assessing the total income of the assessee at Rs. 44,82,61,63,918/- after making additions / disallowances of Rs. 2,61,960,802/- u/s. 14A of the Act. Thereafter, against the assessment order u/s. 143(3) of the Act, dated 26.02.2013, the assessee preferred an appeal before CIT(A). CIT(A) partly allowed the appeal. Being aggrieved, the present appeal is filed.
Conclusion- Held that disallowance of interest under section 14A unjustified as assessee’s own funds are far in excess of the investments made in funds yielding exempt income.
Therefore, even from this perspective, the expenses so claim were not contingent the nature, since the assessee had claimed the ESOP expenses at the time of actual exercise of option by its employees, during the year under consideration. It is also noteworthy that the assessee had reflected such ESOP expenses as “perquisites” in the hands of its employees and TDS at appropriate rate had also been deducted by the assessee company at the time of grant of ESOP benefits to its employees. Accordingly, in view of the judicial precedents on the subject as on date, which have consistently taken the view that ESOP expenses are allowable in the hands of assessees under Section 37 of the Act.
