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TMI Blog2024 (6) TMI 100X X X X Extracts X X X X X X X X Extracts X X X X ..... in favour of the assessee in a plethora of cases including the Hon'ble jurisdictional High Court in M/S. BIOCON LTD. [ 2020 (11) TMI 779 - KARNATAKA HIGH COURT] , LEMON TREE HOTELS LTD [ 2015 (11) TMI 404 - DELHI HIGH COURT] , and the Coordinate Bench of ITAT Delhi Benches. Respectfully following the decision of the Hon'ble High Courts [supra] and Delhi ITAT CVENT INDIA PVT. LTD. [ 2023 (2) TMI 1063 - ITAT DELHI] , we decline to interfere with the findings of the ld. CIT(A) and dismiss the ground raised by the Revenue. - Shri Saktijit Dey, Vice President, And Shri Naveen Chandra, Accountant Member For the Assessee : Shri Kshitij Bansal, CA, Shri Jaskaran Singh, CA For the Department : Shri Vivek Kumar Upadhyay, Sr. DR ORDER PER N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'ble Jurisdictional High Court of Delhi in case of Lemon Tree Hotels Ltd (supra) and jurisdictional Tribunal in case of ACIT v. Cvent India Pvt. Ltd. (ITA No. 523/Del/2020), gave relief to the assessee. 6. Aggrieved, the revenue is in appeal before us on the ground that ESOP expenses claimed as expense by the assessee and cross charged by its parent entity in USA are notional and contingent in nature. 7. The ld DR reiterated the findings of the AO and relied on his order. 8. The Ld AR of the assessee submitted that the assessee debited the share-based expenses of Rs. 4,57,97,006/-in it P L A/c on the basis of the fair value of ESOPs as on grant date and amortized on graded vesting period. This expense was actually been disallowed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ival submission and perusing the relevant material on record, we find that the issue of allowability of expense on account of ESOP is succinctly summarized in the following relevant extracts of the ld. CIT(A)'s order, reproduced as follows: I have carefully perused the assessment order. I find that this issue i.e. allowability of ESOP expenses u/s 37(1), has been decided in favour of the assessee by Hon'ble Jurisdictional High Court of Delhi and Hon'ble High Court of Madras. In a recent decision, the Hon'ble Jurisdictional ITAT Delhi in the case of ACIT Vs Cvent India Pvt. Ltd., ITA No. 523/Del/2020, date of Order 24/02/2023 has placed reliance on the decisions of Hon'ble High Courts of Delhi and Madras and has held that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of ACIT vs Cvent India Pvt. Ltd.(supra), I hold that the ESOP expenses of Rs. 3,77,40,366/- is allowable u/s 37(1) of the Act. Accordingly, the addition of Rs. Rs. 3,77,40,366/- is directed to be deleted. Ground is, thus, allowed. 12. The Hon'ble Jurisdictional High Court of Delhi in the case of Lemon Tree Hotels Limited [supra] has held as under: 2. The question sought to be projected by the Revenue is whether the ITAT erred in deleting the addition of Rs. 1,28,19,169/- made by the Assessing Officer ( AO ) by way of disallowance of the expenses debited as cost of Employees Stock Option ( ESOP ) in profit and loss account? 3. The Court has been shown a copy of the decision dated 19th June 2012 passed by the Division Bench of Madras H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rring of the expenditure by the assessee entitles him for deduction under Section 37(1) of the Act subject to fulfillment of the condition. 14. In view of the discussion above, we find that allowability of the ESOP expenses actually incurred and cross charged by the parent from an assessee has been decided in favour of the assessee in a plethora of cases including the Hon'ble jurisdictional High Court and the Coordinate Bench of ITAT Delhi Benches. Respectfully following the decision of the Hon'ble High Courts [supra] and Delhi ITAT (supra), we decline to interfere with the findings of the ld. CIT(A) and dismiss the ground raised by the Revenue. 15. In the result, the appeal of the Revenue in ITA No. 3489/DEL/2023 stands dismissed. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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