2009 (1) TMI 398

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..... questions of law have now been answered by the Supreme Court in a recent judgment reported in CIT v. Infosys Technologies Ltd. [2008 - TMI - 2973 - SUPREME COURT OF INDIA] in favour of the assessee and against the Revenue. – Hence following the same, appeal by revenue is dismissed - 46 of 2003 - - - Dated:- 16-1-2009 - DEEPAK VERMA and K. RAMANNA JJ. Arvind for M. V. Seshachala for the appellants. Ms. Saina Mary Thomas for M/s. Chander Kumar and Associates. JUDGMENT The judgment of the court was delivered by 1. DEEPAK VERMA J.- Sri Arvind, learned counsel appeared on behalf of the appellants and Miss Saina Mary Thomas, learned counsel appeared for the respondent. 2. Heard on admission. Records perused. 3. The R .....

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..... e assessee and against the Revenue. 6. To highlight the said situation, learned counsel for the respondent has placed reliance on the following relevant paras at the said judgment, which reads thus (page 174) : "15. In the case of CIT v. B. C. Srinivasa Setty [1981] 128 ITR 294 (SC) this court held that the charging section and the computation provision under the 1961 Act constituted an integrated code. The mechanism introduced for the first time under the Finance Act, 1999, by which 'cost' was explained in the manner stated above was not there prior to April 1, 2000. The new mechanism stood introduced with effect from April 1, 2000, only. With the above definition of the word 'cost' introduced, vide sub-clause (iiia), the value o .....

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..... urther, as stated, the benefit was prospective. Unless a benefit is in the nature of income or specifically included by the Legislature as part of income, the same is not taxable. In this case, the shares could not be obtained by the employees till the lock-in-period was over. On the facts, we hold that in the absence of legislative mandate a potential benefit could not be considered as 'income' of the employee(s) chargeable under the head 'Salaries'. The stock was non-transferable and the stock exchange was also accordingly notified. This is where the weightage ought to have been given by the Assessing Officer to an important factor, namely, the lock-in-period. This has not been done. It is important to bear in mind that if the shares allo .....

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