2018 (1) TMI 1677 - HC - Income Tax

Violation of the ESOP option provided by the assessee to its employees - AO disallowed the loss claimed on the ground that it was not a crystallised liability of the assessee - HELD THAT - CIT (A) and the ITAT by concurrent findings followed the judgment of the Madras High Court in Madras High Court in CIT v. P.V.P. Ventures Ltd. 2012 (7) TMI 696 - MADRAS HIGH COURT as well as the decision of this Court in CIT v Oswal Agro Mills Ltd. 2015 (11) TMI 301 - DELHI HIGH COURT and held that issue of debentures or obtaining loans are to be considered as revenue expenditure and consequently the cost of ESOP should be debited to the profit loss account of the assessee. These decisions were later applied in CIT v. Lemon Tree Hotels Ltd. 2015 (11) TMI 404 - DELHI HIGH COURT In the circumstances, the view of the ITAT is reasonable and justified. No question of law arises. The appeal is, therefore, dismissed.

Summary

The High Court dismissed the appeal regarding the violation of ESOP option, following previous judgments related to revenue expenditure and debiting ESOP cost to the profit & loss account. The decision of the ITAT was considered reasonable and justified.