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TMI Blog2016 (12) TMI 1840X X X X Extracts X X X X X X X X Extracts X X X X ..... This is being so, the AO while processing the return u/s. 143(1) of the Act included the income from sale of stock option as income of the assessee. Now the assessee claimed that it could not have been done by the AO at the stage of prima facie adjustments u/s. 143(1) of the Act. In our opinion, when the information is available on record by way of Form No.16 annexed to the return of income the AO cannot keep quiet without making corrections while processing return u/s.143(1) of the Act. In our opinion, the AO is within his jurisdiction in considering the income from sale of stock options as income of assessee which is evident from the Form No.16 attached with the return of income. Being so, we do not find any infirmity in the order of lower authorities. CIT(A) failed to adjudicate certain issue relating to the status of the assessee and also relating to the taxability of the stock option - These are debatable issue cannot be dealt u/s.143(1) of the Act and what cannot be done directly, the same thing cannot be done indirectly. Further, the reading of the whole order of the CIT(A) gives the impression that the CIT(A) has considered the entire facts and circumstances of the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Not Ordinarily Resident as he was Resident in India for 401 days only for the preceding 7 years from April 2002 to 31st March 2009 as against stipulated conditions of 730 days. The assessee started his career working in Google Inc, California, USA from the month of June 2005 and was allotted 5500 stock options with the strike price of $ 274.80 each option and the stock options has vesting schedule over a period of time and assessee has opted stock options from said period. In October 2008, the assessee left USA and employed with Google India (P) Ltd., owned by Google Inc. USA. The assessee was vested aggregate 4500 stock options till financial year 2009-10. The assessee sold 900 stock options vested to him before coming to India on employment for $ 2,53,480 equal to ₹ 1,19,49,709/-. Whereas the above transaction of sale of stock options was executed through Smith Barney Inc. USA and proceeds are directly credited to the assessee's old Bank account in USA and Bank statement identifying the credits was filed with Assessing Officer. Whereas, M/s. Google India (P) Ltd while issuing Form No. 16 for the assessment year 2010-11, disclosed the stock options transactions and deduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt decision in the case of CIT Vs. Anantha Jain ITA No. 165/2009 dated 24.04.2012 wherein held that:- It is clear from the factual findings recorded by both CIT(A) and the Tribunal that the payment in question was received towards retirement benefit/severance/vacation engagement from the erstwhile employer on termination of employment in November, 1999. The erstwhile employer was based in USA and services were rendered to the erstwhile employer in USA. In view of the aforesaid factual position, elucidated and accepted by both the CIT(A) and the Tribunal, we do not think the said amount can be taxed in India, as the status of the respondent-assessee during the year in question was that of Not Ordinary Resident . The said income did not accrue or arise in India. The Tribunal has rightly held that in terms of Section 6 and Section 9(1)(ii) of the Act, the amount/income had not accrued/deemed to be accrued/paid in India. The questions of law are accordingly answered in the affirmative, that is, against the Revenue and in favour of the assessee. The appeal is dismissed with no order as to costs. 4.1 He also relied on judgment of Supreme Court in the case of CIT Vs Morgenstern W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee as compared to the any information in the return, he could correct the same by processing u/s.143(1) of the Act. In other words, if any incorrect claim, if such incorrect claim is apparent from any information in the return, he should correct the same while processing the return u/s.143(1) of the Act. In the instant case, the assessee claimed exemption of substantial amount which was in the form of sale of stock option in USA. However, the Form No.16 annexed to the return of income issued by the present employee of the assessee shows that the stock option received by the assessee was liable for tax and it was subject to TDS by Google India Pvt Ltd., Bangalore and they have deducted the TDS on the same. This is being so, the AO while processing the return u/s. 143(1) of the Act included the income from sale of stock option as income of the assessee. Now the assessee claimed that it could not have been done by the AO at the stage of prima facie adjustments u/s. 143(1) of the Act. In our opinion, when the information is available on record by way of Form No.16 annexed to the return of income the AO cannot keep quiet without making corrections while processing return u/s.143(1) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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