ESOP: ITAT allows difference between fair market value at vesting & exercise dates

Lupin Limited Vs DCIT (ITAT Mumbai) In a recent decision by ITAT Mumbai, Lupin Limited Vs DCIT, the deductibility of ESOP expenses was scrutinized. The article explores the difference between fair market value of equity shares at the vesting and exercise dates, delineating it as allowable expenditure. The assessee, Lupin Limited, had claimed a substantial deduction for ESOP expenses in its revised income return. However, the Assessing Officer (AO) disallowed the deduction, deeming it notional. The matter was appealed, citing the precedent set by Biocon Ltd’s case (144 ITD 21), where the ...