DCIT, New Delhi V. M/s NDTV Media Ltd, New Delhi

ITA 1464/DEL/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2847 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 11 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2009-2010
• Appeal Filed On: 12-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S R SENAPATI
• Keywords: Revenue expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES E : DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA.NO.1464/DEL./2015 ASSESSMENT YEAR 2009-2010 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE- 18(1), NEW DELHI. VS M/S. NDTV MEDIA LTD., 207, OKHLA INDL. ESTATE-III, NEW DELHI 110 003. PAN AABCN6516C (APPELLANT) (RESPONDENT) FOR REVENUE : SHRI S. R. SENAPATI, SR. D.R. FOR ASSESSEE : SHRI SACHIT J OLLY , ADVOCATE. DATE OF HEARING : 0 6 .03.2018 DATE OF PRONOUNCEMENT : 07 .03.2018 ORDER PER BHAVNESH SAINI, J.M. THIS APPEAL BY REVENUE HAS BEEN DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-6, DELHI, DATED 23 RD DECEMBER, 2014, FOR THE A.Y. 2009-2010, CHALLENGING THE ORDER OF THE LD . CIT(A) IN DELETING THE ADDITION MADE BY DISALLOWING THE CLAIM OF ASSESSEE IN RESPECT OF EXPENSES ON ACCOUNT OF ESOP. 2 ITA.NO.1464/DEL./2015 M/S. NDTV MEDIA LTD., NEW DELHI. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT ASSESSE E CLAIMED DEDUCTION OF RS.74,45,580/- BEING THE ESOP EXPENDIT URE COMPUTED IN ACCORDANCE WITH THE GUIDELINES OF SEBI AND ICAI IN THIS REGARD. THE EMPLOYEES WERE COVERED UNDER TH E ESOP SCHEME OF THE ASSESSEE APPROVED BY THE BOARD OF DIR ECTORS. THE ESOP EXPENSES UNDER THE HEAD EMPLOYEE STOCK OPTION WERE CHARGED TO ITS PROFIT AND LOSS ACCOUNT IN ACCORDANC E WITH SCIENTIFIC METHOD GENERALLY FOLLOWED IN RESPECT OF ACCOUNTING OF ESOP EXPENDITURE IN THE LINE WITH THE GUIDELINES OF SEBI. THE AUDITED ACCOUNTS WERE REFERRED TO IN THIS REGARD. T HE ASSESSEE SUBMITTED THAT THE AMOUNTS IN QUESTION MULTIPLY BY DISCOUNT ALLOWED BY THE COMPANY AMOUNTING TO RS.404.65 PER S HARE (WEIGHTED AVERAGE - ISSUE PRICE). THUS, IT WAS SUBM ITTED THAT ENTIRE AMOUNT IS ALLOWABLE DURING THE YEAR UNDER CO NSIDERATION IN VIEW OF DECISION OF THE SPECIAL BENCH OF THE ITA T IN THE CASE OF BIOCON LTD., VS. DCIT (LTU), BANGALORE (2013) 35 TAXMANN.COM 335 (BANG.) (TRIBU.). IT WAS, THEREFORE , SUBMITTED THAT ENTIRE AMOUNT IS ALLOWABLE DEDUCTION. THE ASSE SSEE ON MERIT ALSO MADE SUBMISSIONS THAT THE EXPENDITURE IS ALLOWABLE 3 ITA.NO.1464/DEL./2015 M/S. NDTV MEDIA LTD., NEW DELHI. IN THE HANDS OF THE TAX-PAYER COMPANY. THE LD. CIT( A) DISCUSSED THE ISSUE IN DETAIL AND NOTED THAT IDENTI CAL ISSUE OF ALLOWABILITY OF ESOP EXPENDITURE IS REVENUE EXPENDI TURE, WERE DECIDED BY THE ITAT, SPECIAL BENCH, BANGALORE, IN T HE CASE OF BIOCON LTD., VS. DCIT (LTU), BANGALORE (SUPRA) IN W HICH IT WAS HELD THAT ON PRINCIPLE OF MERIT THE ESOP EXPENSES ARE ALLOWA BLE REVENUE EXPENDITURE IN THE HANDS OF TAX PAYER COMPA NIES. THE LD. CIT(A) DISCUSSED OTHER JUDGMENTS ALSO IN THE IM PUGNED ORDER AND ULTIMATELY DIRECTED THE A.O. TO RE-COMPUT E THE AMOUNT OF DISCOUNT ALLOWABLE AS DEDUCTION ON ACCOUN T OF ESOP AS PER METHOD GIVEN BY SPECIAL BENCH OF ITAT IN THE CASE OF BIOCON LTD., VS. DCIT (LTU), BANGALORE (SUPRA). THE APPEAL OF ASSESSEE WAS ACCORDINGLY ALLOWED ON THIS ISSUE AS P ER THE ABOVE DIRECTIONS. 3. LEARNED COUNSEL FOR THE ASSESSEE AT THE OUTSET SUBMITTED THAT IN A.Y. 2007-2008, THE ITAT, DELHI, E-BENCH IN THE CASE OF SAME ASSESSEE VIDE ORDER DATED 10 TH JULY, 2015, ALLOWED THE APPEAL OF ASSESSEE BY FOLLOWING THE DEC ISION IN THE 4 ITA.NO.1464/DEL./2015 M/S. NDTV MEDIA LTD., NEW DELHI. CASE OF BIOCON LTD., VS. DCIT (LTU), BANGALORE (SUP RA). THE FINDINGS OF THE TRIBUNAL IN PARA-4 ARE REPRODUCED A S UNDER : 4. BOTH THE SIDES ARE IN AGREEMENT THAT THE FACTS AND CIRCUMSTANCES OF THE INSTANT CASE ARE SQUARELY COVE RED BY THIS SPECIAL BENCH DECISION. RESPECTFULLY FOLLOWING THE PRECEDENT, WE SET ASIDE THE IMPUGNED ORDER AND SEND THE MATTER TO THE FILE OF A.O. FOR DECIDING THE ISSUE I N CONFORMITY WITH THE DECISION TAKEN BY THE SPECIAL BENCH IN THE AFORENOTED CASE. 4. COPY OF THE ORDER IS PROVIDED TO THE LD. D.R. T HE LD. D.R. DID NOT DISPUTE THE ABOVE FACTS. 5. CONSIDERING THE FACTS OF THE CASE, WE ARE OF TH E VIEW THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THE ITAT, DELHI E-BENCH IN ASSESSEES OWN CASE FOR THE A.Y. 2007-2008 IN ITA.NO.886/DEL./2012 VIDE ORDER DATED 10 TH JULY, 2015 (SUPRA), IN WHICH ALSO DIRECTIONS HAVE BEEN GI VEN TO A.O. TO DECIDE THE ISSUE IN CONFORMITY WITH THE DECISION OF THE SPECIAL BENCH IN THE CASE OF BIOCON LTD., VS. DCIT (LTU), B ANGALORE 5 ITA.NO.1464/DEL./2015 M/S. NDTV MEDIA LTD., NEW DELHI. (SUPRA). THEREFORE, THERE IS NO INFIRMITY IN THE DI RECTIONS OF THE LD. CIT(A) IN THE IMPUGNED ORDER TO THE A.O. TO RE- COMPUTE THE DEDUCTION ALLOWABLE AS PER DECISION OF THE SPECIAL BENCH OF ITAT IN THE CASE OF BIOCON LTD., VS. DCIT (LTU), BANGALO RE (SUPRA). THE DEPARTMENTAL APPEAL HAS NO MERIT AND THE SAME I S ACCORDINGLY DISMISSED. 6. IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (WASEEM AHMED) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DELHI, DATED 07 TH MARCH, 2018 VBP/- COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT E BENCH, DELHI 6. GUARD FILE. // BY ORDER // ASSISTANT REGISTRAR : ITAT DELHI BENCHES : DELHI.