DCIT, New Delhi V. M/s. Educomp Solutions Ltd., New Delhi

ITA 4872/DEL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 4246 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 12-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHIMA NEB
• Section: 143(3)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NO.4872/DEL/2016 A.Y. : 2013-14 DCIT, CIRCLE 8(1), ROOM NO. 194, C.R. BUILDING, I.P. ESTATE, NEW DELHI VS. EDUCOMP SOLUTIONS LTD. 1211, PADAM TOWER, 1,5, RAJENDRA PLACE, NEW DELHI (PAN: AAACE2983M) (ASSESSEE) (RESPONDENT) REVENUE BY : MS. ASHIMA NEB, SR. DR ASSESSEE BY : NONE ORDER PER H.S. SIDHU : JM THE REVENUE HAS FILED THIS APPEAL AGAINST THE IMPUGN ED ORDER DATED 31.5.2016 OF THE LD. CIT(A)-23, NEW DELHI RELE VANT TO ASSESSMENT YEAR 2013-14. 2. THE GROUNDS RAISED IN THIS APPEAL READ AS UNDER :- 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS OF THE CASE IN ALLOWING THE APPELLANT RELIEF OF RS. 5,82,70,308/- AGAINST THE DISALLOWANCE MADE BY THE AO ON ACCOUNT OF ESOPS EXPENSES. 2 2. THE APPELLANT CRAVES LEAVE, MODIFY, ADD OR FOREGO ANY GROUND(S) OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF APPEAL. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE F ILED ITS RETURN OF INCOME ON 30.9.2013 DECLARING LOSS OF R S. 18,06,93,884/-. THE AO HAS COMPLETED THE REGULAR AS SESSMENT U/S. 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFE RRED AS THE ACT) ON A TOTAL LOSS OF RS. 12,24,23,576/- ON 19.5.201 5 AND MADE THE DISALLOWANCE OF ESOP EXPENSE OF RS. 5,82,70,30 8/-. AGAINST THE AFORESAID ASSESSMENT ORDER, ASSESSEE APPEALED BEF ORE THE LD. CIT(A)-23, NEW DELHI, WHO VIDE HIS IMPUGNED ORDER D ATED 31.5.2016 HAS ALLOWED THE APPEAL OF THE ASSESSEE. AGGRIEVED WITH THE ORDER OF THE LD. CIT(A), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 4. LD. DR RELIED UPON THE ORDER OF THE AO AND REITE RATED THE CONTENTIONS RAISED IN THE GROUNDS OF APPEAL. 5. IN THIS CASE, NOTICE OF HEARING TO THE ASSESSEE WAS SENT BY THE REGISTERED AD POST, IN SPITE OF THE SAME, ASSESSEE, NOR ITS AUTHORIZED REPRESENTATIVE APPEARED TO PROSECUTE THE MATTER IN DISPUTE, NOR FILED ANY APPLICATION FOR ADJOURNMENT. KEEPING IN VIEW THE FA CTS AND CIRCUMSTANCES OF THE PRESENT CASE AND THE ISSUE INVOLVED IN THE P RESENT APPEAL, WE ARE OF THE VIEW THAT NO USEFUL PURPOSE WOULD BE SERVED TO ISSUE NOTICE AGAIN 3 AND AGAIN TO THE ASSESSEE, THEREFORE, WE ARE DECID ING THE PRESENT APPEAL EXPARTE QUA ASSESSEE, AFTER HEARING THE LD. DR AND PERUSING THE RECORDS. 6. WE HAVE HEARD LD. DR AND PERUSED THE RECORDS, E SPECIALLY THE ORDER OF THE LD. CIT(A). WE FIND THAT EARLIER IN LD. CI T(A)S ORDER DATED 03.11.2014 PASSED IN APPEAL NOS.76 TO 79/14-15 & 82 /14-15 IN AYS 2009-,10 TO 2012-13 AND 2008-09 RESPECTIVELY, THE O RDER DT. 26.09.2014 OF THE ITAT DELHI BENCH 'B' NEW DELHI IN ITA NO.83 3/DEL/2012 FOR AY 2008-09 IN THE ASSESSEES OWN CASE, AS ALSO THE ORD ER DT. 16.07.2013 OF THE ITAT BANGTORE BENCH (SPECIAL BENCH) IN BIOCON LTD VS DCIT(LTU) (2013) 35 TAXMAN.COM (BANGLORE-TRIB) HAS DELETED TH E SIMILAR ADDITION BY FOLLOWING THE ITAT ORDER IN ASSESSEES OWN CASE BY OBSERVING AS UNDER:- 'I HAVE EXAMINED THE RECORDS OF THE APPELLANT, THE REPLIES GIVEN BY LD. AR AS ABOVE AND FACTUALLY VERIFIED ITS CLAIMS. THE EXPENDITURE ON ESOPS HAS BEEN CLAIMED ON THE BASIS OF ASCERTAINED . LIABILIT Y BY THE APPELLANT, AND HAS BEEN HELD TO BE ALLOWABLE EXPENDITURE BY THE SPECIAL BENCH IN THE. HANDS OF EMPLOYER COMPANIES. WE HAVE SEEN IN PARA-3.3 ABOVE THAT THIS IS BASED ON SOUND LOGIC AND IN HARMONY WITH THE REVENUE'S OWN POSITION ON TAXABILITY OF ESOPS AS PERQUISITE IN THE HANDS OF EMPLOYEES. IN VIEW OF THE FACTUAL AND LEGAL POSITION AS ABOVE, THE APPELLANT IS ENTITLED TO TH E 4 EXPENSES ON ESOPS AS CLAIMED. I HOLD ACCORDINGLY AND DIRECT THE AO TO ALLOW THE EXPENDITURE AS CLAIMED IN EACH OF THE ASSESSMENT YEARS 2008-09 TO 2012-13. THE GROUNDS OF APPEAL CHALLENGING THE DISALLOWANCE OF ESOPS ARE ALLOWED. 3.6 ITAT VIDE ITS ORDER DATED 26.09.2014 IN ITA NO.833/DEL/2012 IN APPELLANT'S OWN CASE FOR THIS. AY HAS DELETED THE DISALLOWANCE ON ACCOUNT OF EXPENDITURE ON ESOPS AMOUNTING TO RS.8,27,17,775/- MADE IN THE ORIGINAL ASSESSMENT ORDER PASSED U/S 143(3) ON 19.11.2010 AND CONFIRMED IN APPEAL BY LD.CIT(A) VIDE ORDER DATED 21.11.2011. THE ORDER OF ITAT PREVAILS IN THE SAME MATTER IN ISSUE IN THIS ASSESSMENT ALSO.' 6.1 WE FURTHER NOTE THAT THE FACTS OF THE MATTER AR E SIMILAR TO THAT OF THE PRECEDING AYS 2008-09 TO 2012-13 WHICH HAVE BEE N DECIDED IN FAVOUR OF THE ASSESSEE. IN FACT THE AMORTIZATION OF EXPEN SES, BEING THE COST OF THE DISCOUNTED VALUE OF SHARES ALLOTTED TO THE EMPL OYEES UNDER THE ESOP SCHEME DATED 01.04.2007 TO 30.05.2011, HAVE BEEN CL AIMED BY THE ASSESSEE AND THE SAME BEING TAXABLE IN THE HANDS OF THE RESPECTIVE EMPLOYEES HAVE BEEN INCLUDED IN THEIR TAXABLE INCOM E AS PERQUISITE U/S 17(2)(IIIA) OF THE ACT. AFTER PERUSING THE DETAILS OF THE PERQUISITE VALUE IT IS OBSERVED THAT AGAINST THE TOTAL COST OF AMORTIZE D EXPENSES OF 5 RS.44,57,10,475/-, RS.42,34,51,666/- HAVE BEEN INCL UDED AS PERQUISITE DURING THE FYS 2008-09 TO 2012-13 ITSELF (INCLUDIN G UNDER FBT IN FY 2008-09 AND EXPENSES HAVE BEEN CORRECTLY CLAIMED AS EXPENSES, AS AMORTIZED OVER THE YEARS. HENCE, THE LD. CIT(A) BY RESPECTFULLY FOLLOWING THE ABOVE PRECEDENTS, HAS RIGHTLY DELETED THE ADDIT ION IN DISPUTE AND ALLOWED THE APPEAL OF THE ASSESSEE, W HICH DOES NOT NEED ANY INTERFERENCE ON OUR PART, HENCE, WE UPHOLD THE ORDER OF THE LD.CIT(A) ON THE ISSUE IN DISPUTE AND REJECT THE GROU ND RAISED BY THE REVENUE. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE S TANDS DISMISSED. ORDER PRO NOUNCED ON 05/01/2018. SD./- SD/- [T.S. KAPOOR] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 05/01/2018 SRBHATNAGAR COPY FORWARDED TO: - 1. ASSESSEE - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHE S