Aarti Jadhav Gaikwad Vs DCIT (ITAT Pune)
ESOP Valuation Mismatch & Year Confusion – ITAT Grants Relief to Employee by Remand- Stock Options Taxed Twice? Tribunal Sends Back Case for Correct Year-wise Assessment
Assessee, an employee of Nvidia Graphics India Pvt. Ltd., filed her return declaring ₹25.16 lakh income. During scrutiny for “foreign assets,” AO noted that she had acquired ESOP shares of the US parent company worth ₹30.44 lakh & made addition on the ground that these were not reflected properly in income computation. The AO took the value of shares at market rate as on 09.02.2018 (date of filing return) instead of date of acquisition & completed assessment u/s 143(3) assessing income at ₹55.60 lakh.
Before CIT(A)/NFAC, Assessee explained that out of total ₹30.44 lakh, stocks worth ₹13.43 lakh were acquired in FY 2017-18 (relating to AY 2018-19), ₹8.91 lakh had already been included in Form 16 as perquisite, & ₹8.10 lakh was a valuation error-market value substituted for cost. CIT(A) allowed partial relief of ₹8.91 lakh but upheld balance addition, observing that ESOPs of ₹13.43 lakh were not offered in subsequent year & that valuation difference was unsubstantiated.
Before Tribunal, Assessee contended that CIT(A) ignored her evidence including Form 16 & 12BA, & that the remand report obtained from AO was not shared with her. It was argued that ESOPs acquired in August-September 2017 belonged to AY 2018-19, not AY 2017-18, & that corresponding perquisite had already been taxed in AY 2018-19. She also highlighted that inclusion of market value instead of cost was a clerical mistake made while disclosing foreign assets.
