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TMI Blog2021 (9) TMI 1411X X X X Extracts X X X X X X X X Extracts X X X X ..... euticals Ltd [ 2017 (2) TMI 1305 - BOMBAY HIGH COURT] The aforesaid decision of the jurisdictional High Court was upheld by the Hon ble Supreme Court while deciding the appeal of the revenue [ 2018 (12) TMI 608 - SUPREME COURT] . In view of the aforesaid, we uphold the decision of learned Commissioner (Appeals) on this issue. Grounds are dismissed. Disallowance of deduction claimed on employee stock option (ESOP) expenditure - whether ESOP expenditure is allowable u/s 37(1) ? - HELD THAT:- We find, while deciding identical issue in assessee s own case in Assessment Year 2012-13 learned Commissioner (Appeals), following the decision of ITAT, Bengaluru Special Bench in case of M/s Biocon Ltd [ 2013 (8) TMI 629 - ITAT BANGALORE] allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion of learned Commissioner (Appeals). This ground is dismissed. Disallowance u/s 14A r.w.s. rule 8D while computing book profit u/s 115JB - HELD THAT:- We are in agreement with learned Commissioner (Appeals) that while computing books profit under section 115JB of the Act, the assessing officer cannot invoke the provisions of section 14A r.w.r. 8D for making adjustment to the book profit. This legal proposition has been laid down in case of ACIT vs Vireet Investments (P) Ltd [ 2017 (6) TMI 1124 - ITAT DELHI] .Though, the assessing officer is empowered to disallow expenditure incurred for earning exempt income in terms of Explanation 1(f) of section 115JB; however, such expenditure must have a direct nexus with the earning of exempt i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd proceeded to benchmark the transaction with AE by determining arm s length price of guarantee commission @1.5% of the amount on which such guarantee was provided and proposed an adjustment of Rs.1,99,80,691/-. The adjustment so proposed was added back to the income of the assessee. Assessee challenged the aforesaid addition before learned Commissioner (Appeals). Following her decision on identical issue in assessee s own case for Assessment Year 2012-13, learned Commissioner (Appeals) directed the assessing officer to restrict the guarantee commission to 0.5% and delete the balance amount. 4. Having considered rival submissions, we do not find any infirmity in the aforesaid decision of learned Commissioner (Appeals). The Hon ble ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmissions and perused materials on record. The short issue before us is, whether ESOP expenditure is allowable u/s 37(1) of the Act. We find, while deciding identical issue in assessee s own case in Assessment Year 2012-13, learned Commissioner (Appeals), following the decision of ITAT, Bengaluru Special Bench in case of M/s Biocon Ltd vs DCIT 90 DTR (Bang)(SB)(Trib) 289 allowed assessee s claim of deduction by holding that ESOP expenditure is not a contingent liability; hence, is an allowable deduction under section 37(1) of the Act. We have also noted, identical issue has been decided in favour of the assessee in Assessment Year 2008-09 vide ITA No.4545/Del/2015 dated 19-06-2019. It is worth mentioning, the decision of the ITAT Special Be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce before the first appellate authority. Following the order passed by her in assessee s own case in Assessment Year 2012-13 and observing that the suo motu disallowance made by the assessee is more than the exempt income earned during the year, learned Commissioner (Appeals) deleted the disallowance. 10. We have considered rival submissions and perused materials on record. As could be seen from the summary of average value of exempt income yielding investments, interest free fund available and disallowance computed under section 14A filed before us by the learned Counsel for the assessee, the assessee had sufficient interest free fund available with it. Therefore, no disallowance of interest expenditure can be made. Further, we also ..... X X X X Extracts X X X X X X X X Extracts X X X X
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