Kummathi Rameshwara Reddy, CHENNAI V. DCIT, CHENNAI

ITA 335/CHNY/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9552 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-05-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 30-03-2016
• Assessment Year: 2012-2013
• Appeal Filed On: 16-02-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN
• Assessee Lawyers: N V BALAJI
• Keywords: Capital asset; Services rendered outside India; Fair market value; Commercial expediency

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , . !' , $ % BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.390/MDS/2016 ' (' / ASSESSMENT YEAR : 2011-12 SHRI SOUNDARRAJAN PARTHASARATHY, B2 NAHAR DESHNA, 337, EAST MADA STREET, THIRUVANMIYUR, CHENNAI - 600 041. PAN : AAEPP 4945 K V. THE DEPUTY COMMISSIONER OF INCOME TAX, NON CORPORATE CIRCLE 17(1), CHENNAI - 600 034. (*+/ APPELLANT) (,-*+/ RESPONDENT) ./ ITA NOS. 335 & 209/MDS/2016 ' (' / ASSESSMENT YEARS : 2011-12 & 2012-13 SHRI KUMMATHI RAMESWAR REDDY, FLAT NO.6, VISWARETHA APARTMENTS, OLD NO.28, NEW NO.16, 7 TH CROSS STREET, SHASTRI NAGAR, ADYAR, CHENNAI - 600 020. PAN : AASPR 9595 D V. THE DEPUTY COMMISSIONER OF INCOME TAX, NON CORPORATE CIRCLE 17(1), CHENNAI - 600 034. (*+/ APPELLANT) (,-*+/ RESPONDENT) *+ . / / APPELLANTS BY : SH. N.V. BALAJI, ADVOCATE ,-*+ . / / RESPONDENT BY : SH. P. RADHAKRISHNAN, JCIT 0 . 1$ / DATE OF HEARING : 30.03.2016 2!( . 1$ / DATE OF PRONOUNCEMENT : 05.05.2016 2 I.T.A. NO.390/MDS/16 I.T.A. NO.209/MDS/16 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THESE APPEALS FILED BY TWO DIFFERENT ASSESSEES A RE DIRECTED AGAINST THE RESPECTIVE ORDERS OF THE COMMISSIONER O F INCOME TAX (APPEALS)-5, CHENNAI, DATED 20.01.2016, 11.01.2016 AND 20.11.2015 RESPECTIVELY. WHEN THE FORMER HAS FILED APPEAL FOR THE ASSESSMENT YEAR 2011-12, THE LATTER HAS FILED APPEA LS FOR ASSESSMENT YEARS 2011-12 AND 2012-13. SINCE COMMON ISSUE ARISES FOR CONSIDERATION IN ALL THESE APPEALS, WE H EARD THESE APPEALS TOGETHER AND DISPOSING OF THE SAME BY THIS COMMON ORDER. 2. SHRI N.V. BALAJI, THE LD.COUNSEL FOR THE ASSESSE ES, SUBMITTED THAT THE ASSESSEES ARE EMPLOYEES OF M/S COGNIZANT T ECHNOLOGIES INDIA PVT. LTD. DURING THE YEARS UNDER CONSIDERATI ON, M/S COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION, A DELAWARE CORPOR ATION, USA, THE PARENT COMPANY OF THE ASSESSEES, PROMOTED AN IN CENTIVE PLAN FOR THE EMPLOYEES OF M/S COGNIZANT TECHNOLOGIES IND IA PVT. LTD. KNOWN AS 1999 INCENTIVE COMPENSATION PLAN. AS PE R THIS PLAN PROMOTED BY THE PARENT COMPANY, NAMELY, M/S COGNIZA NT TECHNOLOGY SOLUTIONS CORPORATION, A DELAWARE CORPOR ATION, USA, 3 I.T.A. NO.390/MDS/16 I.T.A. NO.209/MDS/16 OPTION WAS GIVEN TO THE EMPLOYEES OF M/S COGNIZANT TECHNOLOGIES INDIA PVT. LTD. FOR PROVIDING STOCK APPRECIATION RI GHTS. THE ASSESSEES, BEING EMPLOYEES OF M/S COGNIZANT TECHNOL OGIES INDIA PVT. LTD., WERE ELIGIBLE FOR PARTICIPATION IN 1999 INCENTIVE COMPENSATION PLAN ANNOUNCED BY THE PARENT COMPANY. ACCORDING TO THE LD. COUNSEL, STOCK APPRECIATION RIGHT IS NOT HING BUT A RIGHT FOR APPRECIATION OF THE VALUE OF SHARES GIVEN / ALLOTTE D TO THE ASSESSEES BY THE PARENT COMPANY. AS PER THE STOCK APPRECIATI ON RIGHTS, THE ASSESSEES WERE NOT OFFERED ANY SECURITY OR SWEAT EQ UITY SHARES. WHAT WAS GIVEN TO THE ASSESSEES IS A RIGHT FOR APPR ECIATING THE VALUE OF CERTAIN SPECIFIED NUMBER OF SECURITIES. D URING THE YEAR UNDER CONSIDERATION, M/S COGNIZANT TECHNOLOGIES IND IA PVT. LTD. DEDUCTED TAX BY TREATING THE STOCK APPRECIATION RIG HTS AS A PERQUISITE IN THE HANDS OF THE ASSESSEES. STOCK AP PRECIATION RIGHTS WAS ALSO SUBJECTED TO TAX IN USA SINCE THE PARENT C OMPANY, NAMELY, M/S COGNIZANT TECHNOLOGY SOLUTIONS CORPORAT ION, A DELAWARE CORPORATION, USA HAS ALSO DEDUCTED TAX. A CCORDING TO THE LD. COUNSEL, THE STOCK APPRECIATION RIGHTS AVAI LED BY THE ASSESSEES SUFFERED TAX TWICE, ONCE IN USA AND AGAIN IN INDIA. 4 I.T.A. NO.390/MDS/16 I.T.A. NO.209/MDS/16 3. SHRI N.V. BALAJI, THE LD.COUNSEL FOR THE ASSESSE ES, SUBMITTED THAT STOCK APPRECIATION RIGHTS OFFERED TO THE ASSES SEES IS A CAPITAL ASSET, THEREFORE, THE REALIZATION OF VALUE OF THE S TOCK APPRECIATION RIGHTS IS NOTHING BUT CAPITAL GAIN. THE LD.COUNSEL FURTHER SUBMITTED THAT SINCE NO SECURITY WAS OFFERED OR ALLOTTED TO T HE ASSESSEES, THE STOCK APPRECIATION RIGHTS CANNOT BE CONSTRUED AS PE RQUISITE IN THE HANDS OF THE ASSESSEES. ACCORDING TO THE LD. COUNS EL, STOCK APPRECIATION RIGHTS WAS GRANTED TO THE ASSESSEES UN DER 1999 INCENTIVE COMPENSATION PLAN DURING THE YEARS 2000 AND 2002. ACCORDING TO THE LD. COUNSEL, STOCK APPRECIATION RI GHTS WAS GIVEN TO THE ASSESSEES FOR THE SERVICE RENDERED TO M/S CO GNIZANT TECHNOLOGIES INDIA PVT. LTD. IN INDIA DURING THE VE STING PERIOD. WHEN THE RIGHT WAS VESTED ON THE ASSESSEES, THE ASS ESSEES WERE NON-RESIDENT INDIANS RENDERING SERVICE OUTSIDE INDI A. THEREFORE, THE VALUE OF STOCK APPRECIATION RIGHTS IS NOT TAXABLE I N INDIA EVEN THOUGH WHEN THE RIGHT WAS EXERCISED, THE ASSESSEES WERE RESIDENTS OF INDIA. THE LD.COUNSEL FURTHER SUBMITTED THAT TH E STOCK APPRECIATION RIGHTS WAS GIVEN BY USA COMPANY AND TH E ASSESSEE WERE NOT EMPLOYEES OF USA COMPANY, THEREFORE, IT CA NNOT BE CONSTRUED AS PERQUISITE IN THE HANDS OF THE ASSESSE ES. ACCORDING TO THE LD. COUNSEL, THERE WAS NO EMPLOYER AND EMPLO YEE 5 I.T.A. NO.390/MDS/16 I.T.A. NO.209/MDS/16 RELATIONSHIP BETWEEN M/S COGNIZANT TECHNOLOGY SOLUT IONS CORPORATION, A DELAWARE CORPORATION, USA AND THE AS SESSEES. THEREFORE, WHATEVER AMOUNT RECEIVED BY THE ASSESSEE S FROM M/S COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION, A DELAW ARE CORPORATION, USA BY WAY OF STOCK APPRECIATION RIGHT S IS NOT TAXABLE IN INDIA EITHER AS SALARY OR AS PERQUISITE. THE LD.COUNSEL FURTHER SUBMITTED THAT THE AMOUNT REALIZED ON STOCK APPRECIATION RIGHTS WAS SUBJECTED TO TAX IN USA, THEREFORE, TAXI NG THE SAME AMOUNT IN INDIA WOULD AMOUNT TO DOUBLE TAXATION. 4. ON THE CONTRARY, SH. P. RADHAKRISHNAN, THE LD. D EPARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSEES ARE EM PLOYEES OF M/S COGNIZANT TECHNOLOGIES INDIA PVT. LTD. THE ASSESSE ES WERE OFFERED EMPLOYEE STOCK OPTION DURING THE YEAR UNDER CONSIDERATION AND THE ASSESSEES REALIZED THE VALUE OF THE SPECIFI C SECURITY ALLOTTED TO THEM. ACCORDING TO THE LD. D.R., THE DIFFERENCE BETWEEN THE MARKET VALUE OF SHARES ON THE DATE OF EXERCISING OF OPTION AND THE GRANT PRICE OF THE SHARES WAS TAXABLE AS PERQUISITE IN THE HANDS OF THE RECIPIENT EMPLOYEES. ACCORDING TO THE LD. D.R. , WHAT WAS PAID TO THE ASSESSEES WAS IN LIEU OF SALARY, THEREFORE, IT IS A PERQUISITE IN THE HANDS OF THE ASSESSEES. REFERRING TO SECTION 1 7(2) OF THE 6 I.T.A. NO.390/MDS/16 I.T.A. NO.209/MDS/16 INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'), THE LD. D.R. SUBMITTED THAT THE VALUE OF ANY SPECIFIED SECURITY OR SWEAT EQUITY SHARES ALLOTTED OR TRANSFERRED DIRECTLY OR INDIRECTLY BY THE EMPLOYER AT FREE OF COST OR AT CONCESSIONAL RATE TO ITS EMPLOYEES SHOULD BE TAXED AS PERQUISITE IN THE HANDS OF THE EMPLOYEES. IN THIS CASE, THE ASSE SSEES CLAIM THAT THE OPTION WAS GIVEN BY THE PARENT COMPANY TO THE E MPLOYEES OF INDIAN SUBSIDIARY COMPANY. 5. REFERRING TO SECTION 17(2)(VI) OF THE ACT, THE L D. D.R. SUBMITTED THAT WHEN THE VALUE OF SPECIFIED SECURITY OR SWEAT EQUITY SHARES WAS TRANSFERRED DIRECTLY OR INDIRECTLY BY TH E EMPLOYER EITHER FREE OF COST OR AT CONCESSIONAL RATE, THE SAME HAS TO BE TREATED AS PERQUISITE IN THE HANDS OF THE RECIPIENT EMPLOYEES. IN THIS CASE, THE ASSESSEES WERE EMPLOYEES OF INDIAN COMPANY, WHICH I S SUBSIDIARY OF M/S COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION, A DELAWARE CORPORATION, USA. THE ASSESSEES, BEING EMPLOYEES OF THE SUBSIDIARY COMPANY TO THE PARENT COMPANY, NAMELY, M /S COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION, A DELAWARE CORPOR ATION, USA, WERE ALLOTTED STOCK APPRECIATION RIGHTS. THEREFORE , ACCORDING TO THE LD. D.R., THE BENEFIT WAS CONFERRED ON THE ASSE SSEES BEING EMPLOYEES OF INDIAN COMPANY WHICH IS SUBSIDIARY TO THE USA 7 I.T.A. NO.390/MDS/16 I.T.A. NO.209/MDS/16 COMPANY. THEREFORE, ACCORDING TO THE LD. D.R., A B ENEFIT WAS CONFERRED ON THE ASSESSEES INDIRECTLY, THEREFORE, I T IS A PERQUISITE IN THE HANDS OF THE ASSESSEES. HENCE, BOTH THE AUTHOR ITIES BELOW HAVE RIGHTLY FOUND THAT THE VALUE OF STOCK APPRECIA TION RIGHTS IS LIABLE FOR TAXATION IN INDIA. 6. REFERRING TO THE CLAIM OF THE ASSESSEE THAT THE SAME AMOUNT WAS TAXED IN USA, THE LD. DEPARTMENTAL REPRESENTATI VE SUBMITTED THAT THE ASSESSEE HAS NOT FILED ANY CERTIFICATE FRO M TAX AUTHORITIES OF USA FOR PAYMENT OF TAX IN RESPECT OF STOCK APPRECIA TION RIGHTS WHICH WAS SUBJECT MATTER OF TAXATION IN THESE APPEA LS. THEREFORE, ACCORDING TO THE LD. D.R., THE CIT(APPEALS) HAS RIG HTLY CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THE ASSESSEES ARE EMPLOYEES OF M/S COGNIZANT TECHNOLOGI ES INDIA PVT. LTD., WHICH IS A SUBSIDIARY COMPANY OF M/S COGNIZAN T TECHNOLOGY SOLUTIONS CORPORATION, A DELAWARE CORPORATION, USA. IT IS NOT IN DISPUTE THAT THE ASSESSEES WERE GIVEN STOCK APPRECI ATION RIGHTS. AS PER THE SCHEME PROMOTED BY M/S COGNIZANT TECHNOL OGY SOLUTIONS CORPORATION, A DELAWARE CORPORATION, USA, STOCK 8 I.T.A. NO.390/MDS/16 I.T.A. NO.209/MDS/16 APPRECIATION RIGHTS IS NOTHING BUT PAYMENT IN CASH TO THE EXCESS OF FAIR MARKET VALUE OF COMMON STOCK OR OTHER SPECIFIE D VALUATION OF SPECIFIED NUMBER OF SHARES OF COMMON STOCK ON THE D ATE THE STOCK APPRECIATION RIGHTS WAS EXERCISED OVER THE FAIR MAR KET VALUE OF THE COMMON STOCK OR OTHER SPECIFIED VALUATION. THE ELI GIBILITY CONDITION FOR PARTICIPATION IN THE SCHEME IS THAT THE RECIPIE NTS SHOULD BE EMPLOYEES OF THE COMPANY OR NON-EMPLOYEE DIRECTORS AND INDEPENDENT CONTRACTORS. THE ASSESSEES NOW CLAIM T HAT THEY ARE EMPLOYEES OF M/S COGNIZANT TECHNOLOGIES INDIA PVT. LTD. AND NOT OF M/S COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION, A D ELAWARE CORPORATION, USA. THEREFORE, THE VALUE OF THE STOC K APPRECIATION RIGHTS CANNOT BE TREATED AS PERQUISITE IN THE HANDS OF THE ASSESSEES. THIS TRIBUNAL IS OF THE CONSIDERED OPIN ION THAT IF THE ASSESSEES WERE NOT EMPLOYEES OF THE M/S COGNIZANT T ECHNOLOGIES INDIA PVT. LTD., A SUBSIDIARY COMPANY OF M/S COGNIZ ANT TECHNOLOGY SOLUTIONS CORPORATION, A DELAWARE CORPORATION, USA, THEY WOULD NOT HAVE BEEN GIVEN OPTION OF AVAILING STOCK APPREC IATION RIGHTS UNDER THE SCHEME. IT IS THE CASE OF THE ASSESSEES THAT THE STOCK APPRECIATION RIGHTS WAS GIVEN TO ALL THE PERSONS WH O ARE NOT CONNECTED WITH M/S COGNIZANT TECHNOLOGY SOLUTIONS C ORPORATION, A DELAWARE CORPORATION, USA. THE OPTION WAS GIVEN TO THE 9 I.T.A. NO.390/MDS/16 I.T.A. NO.209/MDS/16 EMPLOYEES WHO ARE IN ASSOCIATION OR CONNECTED WITH USA COMPANY, EITHER DIRECTLY OR INDIRECTLY, SO AS TO MOTIVATE TH E EMPLOYEES TO PERFORM THEIR BEST IN THEIR WORK. THEREFORE, DIREC TLY THE M/S COGNIZANT TECHNOLOGIES INDIA PVT. LTD. WOULD BE BEN EFITED AND INDIRECTLY M/S COGNIZANT TECHNOLOGY SOLUTIONS CORPO RATION, A DELAWARE CORPORATION, USA IS ALSO BENEFITED. THERE FORE, THE CONTENTION OF THE ASSESSEES THE INCENTIVE WAS NOT P ROVIDED BY THE EMPLOYER OF THE ASSESSEES IS NOT CORRECT. THE PARE NT COMPANY, WHO IS INTERESTED IN THE BUSINESS OF THE M/S COGNIZ ANT TECHNOLOGIES INDIA PVT. LTD., IN ORDER TO PROMOTE THEIR BUSINESS AND FOR COMMERCIAL EXPEDIENCY, THE SCHEME WAS PROMOTED AND OFFERED TO THE ASSESSEES AN OPTION. THE ASSESSEES BEING EMPLO YEES OF M/S COGNIZANT TECHNOLOGIES INDIA PVT. LTD., ACCEPTED TH E OFFER AND BENEFITED AND ENRICHED THEMSELVES. THIS PAYMENT IS IN ADDITION TO SALARY FOR THE SERVICE RENDERED TO M/S COGNIZANT TE CHNOLOGIES INDIA PVT. LTD. THEREFORE, THIS TRIBUNAL IS OF THE CONSI DERED OPINION THAT WHAT WAS RECEIVED BY THE ASSESSEE IS A PERQUISITE I N THE HANDS OF THE ASSESSEE-COMPANY OR BENEFIT IN LIEU OF SALARY F OR THE SERVICES RENDERED. HENCE, THE SAME HAS TO BE CONSTRUED AS I NCOME IN THE HANDS OF THE ASSESSEES. 10 I.T.A. NO.390/MDS/16 I.T.A. NO.209/MDS/16 8. AS FOR THE CONTENTION OF THE LD.COUNSEL FOR THE ASSESSEES THAT WHAT WAS GIVEN TO THE ASSESSEES IN THE FORM OF STOCK APPRECIATION RIGHTS IS A CAPITAL ASSET IN THE HANDS OF THE ASSESSEES, THEREFORE, THE SAME CANNOT BE TREATED AS INCOME OF THE ASSESSEES, THIS TRIBUNAL DO NOT FIND ANY MERIT IN THIS CONTENT ION OF THE LD.COUNSEL. THE INCENTIVE WAS GIVEN TO THE ASSESSE ES AS A COMPENSATION FOR THE SERVICES RENDERED TO M/S COGNI ZANT TECHNOLOGIES INDIA PVT. LTD. IT WAS NOT GIVEN FOR TRANSFER OF CAPITAL ASSET OR TERMINATION OF ANY SOURCE OF INCOME. THER EFORE, THE RIGHT CONFERRED ON THE ASSESSEES, NAMELY, STOCK APPRECIAT ION RIGHTS UNDER THE SCHEME CANNOT BE CONSTRUED AS CAPITAL ASS ET. WHAT WAS CONFERRED ON THE ASSESSEES IS ONLY VALUATION OF APP RECIATION FOR A SPECIFIED NUMBER OF STOCKS. THE STOCK ITSELF WAS N OT CONFERRED ON THE ASSESSEES. THE STOCK WAS RETAINED IN THE COMMO N KIT AND THE APPRECIATION VALUE WAS GIVEN TO THE ASSESSEES. THI S WAS GIVEN BECAUSE THE ASSESSEES WERE EMPLOYEES OF SUBSIDIARY COMPANY OF M/S COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION, A D ELAWARE CORPORATION, USA. SINCE THE RIGHT TO RECEIVE THE A PPRECIATION VALUE ALONE WAS CONFERRED ON THE ASSESSEES AND NOT RIGHT ON THE STOCK ITSELF, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT WHAT WAS 11 I.T.A. NO.390/MDS/16 I.T.A. NO.209/MDS/16 RECEIVED BY THE ASSESSEES IS NOT CAPITAL ASSET. HE NCE, THE SAME IS LIABLE FOR TAXATION AS REVENUE RECEIPT. 9. COMING TO THE NEXT CONTENTION OF THE ASSESSEES T HAT DURING THE VESTING PERIOD, THE ASSESSEES WERE NON-RESIDENT S AND RENDERED SERVICE OUTSIDE INDIA, THEREFORE, NOT TAXABLE IN IN DIA, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE BENEFIT WAS CONF ERRED ON THE ASSESSEES IN THE FORM OF STOCK APPRECIATION RIGHTS FOR THE SERVICES RENDERED TO THE SUBSIDIARY COMPANY, M/S COGNIZANT T ECHNOLOGIES INDIA PVT. LTD. THEREFORE, MERELY BECAUSE THE ASSE SSEES WERE NON- RESIDENTS AND RENDERED SERVICE OUTSIDE INDIA DURING THE VESTING PERIOD THAT CANNOT BE A REASON FOR CLAIMING THAT TH E SAME WAS NOT TAXABLE IN INDIA. ADMITTEDLY, WHEN THE ASSESSEES E XERCISED OPTION FOR STOCK APPRECIATION RIGHTS, THEY WERE RESIDENTS IN INDIA. THEREFORE, WHEN THE STOCK APPRECIATION RIGHTS WAS V ESTED IRRESPECTIVE OF THE RESIDENCY, THE SAME IS LIABLE F OR TAXATION IN INDIA. 10. THE ASSESSEES ALSO CONTENDED BEFORE THIS TRIBUN AL THAT THE VALUE OF STOCK APPRECIATION RIGHTS ON REALIZATION S UFFERED TAX IN USA, THEREFORE, IT CANNOT BE TAXED AGAIN IN INDIA. AS RIGHTLY SUBMITTED BY THE LD. D.R., THERE IS NO MATERIAL AVA ILABLE ON RECORD TO SUGGEST THAT THE VALUE OF STOCK APPRECIATION RIGHTS WAS SUFFERED TAX 12 I.T.A. NO.390/MDS/16 I.T.A. NO.209/MDS/16 IN USA. THE ASSESSEES HAVE NOT PRODUCED THE CERTI FICATE BEFORE THE AUTHORITIES BELOW OR BEFORE THIS TRIBUNAL FROM USA TAX AUTHORITIES TO SUPPORT THE CLAIM THAT THE SAME WAS SUBJECTED TO TAX IN USA. SINCE THE ASSESSEES CLAIM THAT THE VALUE O F STOCK APPRECIATION RIGHTS WAS SUBJECTED TO TAXATION IN US A, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE SAME HAS TO B E EXAMINED IN THE LIGHT OF THE DOUBLE TAXATION AVOIDANCE AGREEMEN T BETWEEN GOVERNMENT OF INDIA AND GOVERNMENT OF USA ON THE BA SIS OF THE CERTIFICATE ISSUED BY THE TAX AUTHORITIES IN USA. THEREFORE, WHILE CONFIRMING THAT THE VALUE OF STOCK APPRECIATION RIG HTS RECEIVED BY THE ASSESSEES IS LIABLE FOR TAXATION, THE MATTER IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER FOR LIMITED PURPO SE OF EXAMINING WHETHER THE ASSESSEE HAS PAID TAX IN USA ON THE VAL UE OF THE VERY SAME STOCK APPRECIATION RIGHTS IN THE LIGHT OF THE DOUBLE TAXATION AVOIDANCE AGREEMENT BETWEEN GOVERNMENT OF INDIA AND GOVERNMENT OF USA. 11. IN THE RESULT, APPEALS OF THE ASSESSEES ARE PAR TLY ALLOWED FOR STATISTICAL PURPOSES. 13 I.T.A. NO.390/MDS/16 I.T.A. NO.209/MDS/16 ORDER PRONOUNCED ON 5 TH MAY, 2016 AT CHENNAI. SD/- SD/- (. !' ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 5 TH MAY, 2016. KRI. . ,156 76(1 /COPY TO: 1. *+ /APPELLANTS 2. ,-*+ /RESPONDENT 3. 0 81 () /CIT(A)-5, CHENNAI 4. PRINCIPAL CIT-9, CHENNAI 5. 69 ,1 /DR 6. :' ; /GF.