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The Tax Publishers Korn Ferry International Pvt. Ltd. v. Dy. CIT [ITA No. 5152/Mum/2012, dt. 31-3-2016] : 2016 TaxPub(DT) 2288 (Mum-Trib) Payment to group parent for allotment of ESOP allowability with FBT applied only on vested portion *Facts:* Assessee firm in executive search business had allotted ESOP shares of its group parent. FBT was paid on the vested portion of INR 50.6 lakhs. However the parent had charged INR 1.07 crores as the full price of the allotted ESOP. The assessing officer/Commissioner (Appeals) had disallowed the balance INR 56 lakhs as no FBT was paid on the same. On appeal - assessee pleaded that the allowability of ESOP deduction was separate to FBT and FBT would be applicable only on the vested portion of the ESOP also the entire amount was INR 1.07 crores was paid by them to the group parent for such ESOP thus eligible for deduction. Held in favour of the assessee applying Biocon Ltd. 144 ITD 21 (SB) (Bang.); Novo Nordisk India Pvt. Ltd. 42 taxmann.com 168 that the ESOP amount paid was an allowable expenditure no matter FBT un-paid wholly on the same.

The Tax Publishers

Korn Ferry International Pvt. Ltd. v. Dy. CIT [ITA No. 5152/Mum/2012, dt. 31-3-2016] : 2016 TaxPub(DT) 2288 (Mum-Trib)

Payment to group parent for allotment of ESOP allowability with FBT applied only on vested portion

Facts:

Assessee firm in executive search business had allotted ESOP shares of its group parent. FBT was paid on the vested portion of INR 50.6 lakhs. However the parent had charged INR 1.07 crores as the full price of the allotted ESOP. The assessing officer/Commissioner (Appeals) had disallowed the balance INR 56 lakhs as no FBT was paid on the same. On appeal - assessee pleaded that the allowability of ESOP deduction was separate to FBT and FBT would be applicable only on the vested portion of the ESOP also the entire amount was INR 1.07 crores was paid by them to the group parent for such ESOP thus eligible for deduction.

Held in favour of the assessee applying Biocon Ltd. 144 ITD 21 (SB) (Bang.); Novo Nordisk India Pvt. Ltd. 42 taxmann.com 168 that the ESOP amount paid was an allowable expenditure no matter FBT un-paid wholly on the same.