ITAT Upholds ESOP Expense Deductions After Finding AO's Verification Adequate u/s 263, Rejects PCIT's Revision Order.

ITAT quashed revision order under s.263 regarding ESOP expenses claimed by assessee as deduction. Assessee provided comprehensive documentation including TP report under s.92D(1), employee details, valuation reports, and accounting treatment compliant with ICAI guidelines. ESOP costs were properly recorded as salary compensation, with parent company MakeMyTrip (Mauritius) shares listed on NASDAQ. AO conducted adequate verification before allowing deduction, examining grant price calculations and vesting schedules. ITAT found PCIT's revision grounds untenable as AO had performed necessary inquiries. The tribunal confirmed ESOP expenses as legitimate business deduction, noting their role in employee retention and motivation. .....

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