Jubilant Foodworks Limited Vs DCIT (ITAT Delhi)
ITAT Delhi held that discount on issue of Employee Stock Ownership Plan [ESOP] is allowable as deduction under section 37 of the Income Tax Act. Accordingly, additional claim of ESOP expense allowed.
Facts- Issue involved herein is that assessee claimed ESOP expenditure for the first time as cross objection before ITAT. AO concluded that such notional losses are not allowable under the provisions of the Act and accordingly disallowed the claim. CIT(A) upheld the action of AO. Being aggrieved, the present appeal is filed.
Conclusion- Held that during the first round of appellate proceedings, the Tribunal after consideration to the facts and the position of law, allowed the additional claim of ESOP expenditure. Since this issue was first time raised in the appellate forum and not claimed in the ROI, the coordinate Bench felt that this issue needs examination and remitted the issue to the file of Assessing However, Assessing Officer has applied his lower wisdom and rejected the claim of the assessee without considering the higher wisdom of Hon’ble High Court and ITAT Special Bench. The coordinate Bench felt that this issue needs examination and gave one opportunity to the Revenue, but lower authorities does not care for the opportunity and in order to keep the issue alive since the ESOP issue was pending before Hon’ble Supreme Court, they have grossly rejected the claim of the assessee. Therefore, respectfully following the decision of Hon’ble High Court in Biocon Ltd. (supra), we direct the Assessing Officer to allow the claim of the assessee. Accordingly, the grounds raised by the assessee are allowed.
