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TMI Blog2018 (1) TMI 1631X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year. Respectfully following the same, we confirm the action of the ld. CIT(A) who direct the A.O. to treat the amount as a capital receipt who had merely followed the stand in the assessment year 2010-11. Grievance of the Assessing Officer is accordingly rejected. Employee s stock option plan as an allowable expenditure u/s.37(1) - HELD THAT:- The Hon ble High Court of Madras in the case of PVP Ventures Ltd [ 2012 (7) TMI 696 - MADRAS HIGH COURT] has allowed such claim as business expenditure and the Hon ble High Court of Delhi in the case of Lemon Tree Hotels Ltd. [ 2015 (11) TMI 404 - DELHI HIGH COURT] has followed the decision of the Hon ble High Court of Madras held that cost of ESOP could be debited in Profit and Loss account of the assessee. Respectfully following the aforementioned decisions, we direct the A.O to allow the claim of deduction on account of remuneration to ESOP - Decided against revenue. - ITA No.3330/Ahd/2015, ITA No.3362/Ahd/2015 - - - Dated:- 5-1-2018 - PRAMOD KUMAR AM AND S S GODARA JM For the Appellant : Bandish Soparkar For the Respondent : Surendra Kumar ORDER Per Pramod Kumar, AM: 1. These cross appeals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made on the ground that these expenses were incurred in earning dividend income which is exempt from tax. It is by now settled legal position that disallowance under section 14A of the Act cannot exceed the related exempt income, and that in a case in which the assessee does not have earned any tax exempt income in the particular year, the disallowance under section 14A of the Act cannot be made either. In assessee s own case for the assessment year 2010-11, vide order dated 10.02.2017, a co-ordinate bench of this Tribunal has inter alia held as follows :- 19. We have carefully considered the orders of the authorities below. It is not in dispute that the assessee has not received any exempt income during the year under consideration. The disallowance has been made on finding of the fact that the assessee has made certain investments out of borrowed funds. In our considered opinion, since the assessee has not earned any exempt income, no disallowance u/s. 14A read with Rule 8D is called for. Our view is also fortified by the decision of the Hon ble High Court of Gujarat in the case of Corrtech Energy Ltd. 372 ITR 97. Held that the Tribunal had recorded the finding of fact that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (A). The applicable policy covered in favour of the appellant by IT AT, Ahmedabad's Common Order for AY 2003-04 to AY 2005-O6 4 Lucknow (Uttar Pradesh) 14,656,794 Held to be a capital receipt not exigible to tax for Assessment Years 2008-09 to 2009-10 by CIT(A) 5 Indore (Madhya Pradesh) 5,656,806 Held to be a capital receipt not exigible to tax for Assessment Years 2006-07 to 2009-10 Assessment Year by CIT(A) 6 Nagpur2 (Maharashtra) 11,372,664 First year of claim. However, same facts as in Pune and Nariman Point apply. The applicable policy covered in favour of the appellant by IT AT, Ahmedabad's Common Order for AY2003-04 to 2005- 06 7 Darjeeling (West Bengal) 2,633,719 Held to be a capital receipt not exigible to tax for Assessment Years 2008-09 to 2009-10. The applicable policy covered in favour of the appellant b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, accepted the plea of the assessee after re lying, inter alia, on the State Government's notification and deleted the entire addition by treating the entertainment subsidy as a capital receipt because said amount had been credited in the books of account of the assessee as a liability under the head Capital Subsidy . * The Tribunal upheld the order of the Commissioner (Appeals). 13. And on appeal, the Hon ble High Court held as under:- *In the instant case, it is more than apparent that the State Government proceeded to exempt entertainment tax for a period of 5 years payable by a new cinema hall constructed, subject to the condition that commercial exhibition of films in such cinema hall was required to be started by 31-3-2000. *In the scheme of the Rajasthan Entertainments and Advertisements Tax Act, 1957, where entertainment tax is determined and recoverable from the proprietor of the entertainment and is levied with reference to the number of admissions to the entertainment, when the State Government had exempted such proprietor of new cinema hall from payment of entertainment tax on the given condition, the object was clearly to promote the construction o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - 2) On the facts and in the circumstances of the case and in law, the Ld. CIT(Appeals) erred in by holding Employee s stock option plan amounting to ₹ 1621904/- as an allowable expenditure u/s.37(1) of the Income Tax Act, 1961 without appreciating the findings of Assessing Officer . 13. Learned representatives fairly agree that this issue is also covered in favour of the assessee by Tribunal s decision in assessee s own case for the assessment year 2008-09 wherein the Tribunal has inter alia observed as follows :- 7. We have carefully considered the orders of the authorities below. We find force in the contention of the ld. counsel. The Co-ordinate Bench in the case of the Cera Sanitaryware Ltd. (supra) has considered this issue at para 9 of its order and at para 10, the Tribunal considered the decision of the Special Bench in the case of Biocon Ltd. 25 ITR (Trib.) 602 and after considering the decision of the Special Bench directed the A.O to claim of deduction. 8. The Hon ble High Court of Madras in the case of PVP Ventures Ltd. 25 Taxmann.com 286 has allowed such claim as business expenditure and the Hon ble High Court of Delhi in the case of Lemon Tree Hot ..... X X X X Extracts X X X X X X X X Extracts X X X X
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