DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1(4), BENGALURU vs. FLIPKART INDIA PVT LTD, BENGALURU
What did the Tribunal hold?
The Tribunal held that the sale of goods at a loss did not amount to the creation of intangible assets and that ESOP expenses were allowable as revenue expenditure. The Tribunal also ruled that TDS was not applicable on these ESOP expenses.
What were the facts?
The Revenue appealed against the CIT(A)'s order which deleted additions made by the AO. The additions pertained to the capitalization of marketing intangibles and disallowance of ESOP expenses claimed by the assessee, Flipkart India Pvt. Ltd.
What were the issues?
Whether expenses incurred on ESOPs are revenue expenditure and whether they are subject to TDS. Also, whether selling goods below cost creates intangible assets.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Cases cited in this judgment(6)Show listHide list
Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.
- Biocon Ltd. v. DCIT322 citing144 ITD 21 · 2013 · ITAT
- CIT v. Biocon Ltd.242 citing121 Taxmann.com 351 · 2020 · HC
- Novo Nordisk India P. Ltd. v. DCIT35 citing42 Taxmann.com 168 · 2014 · ITAT · Read judgment
- CIT v. Biocon Ltd.27 citing276 Taxmann 1 · 1983
- (supra) Flipkart India (P.) Ltd. v. Assistant Commissioner of Income-tax, Circle-3 (1) (1), Bangalore10 citing92 Taxmann.com 387 · 2018 · ITAT
- Flipkart India (P.) Ltd. v. Assistant Commissioner of Income-tax4 citing150 Taxmann.com 272 · 2023
Income Tax Appellate Tribunal, “A” BENCH : BANGALORE
Before: SHRI PRASHANT MAHARISHI & SHRI KESHAV DUBEY
Per Prashant Maharishi, Vice President
ITA Nos.1394 & 1395/Bang/2025 for the AYs 2020-21 & 2021-22 respectively are filed by the DCIT, CC 1(4), Bengaluru (the assessee/appellant) against the appellate order of the CIT(Appeals)-11, Bengaluru dated 28.4.2025 wherein the appeal filed by the assessee against the assessment orders passed u/s. 143(3) of the Income Tax
ITA Nos.1394 & 1395/Bang/2025 Act, 1961 [the Act] passed u/s. 143(3) of the Act dated 30.8.2024 and 22.11.2024, were allowed.
The Revenue is aggrieved and in appeal before us.
For the AY 2020-21,
The order continues below.
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The Tribunal held that ESOP expenditure is revenue in nature and eligible for deduction under Section 37 of the Act. The claim made during assessment proceedings should be allowed, following previous judicial pronounceme...
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