What did the Tribunal hold?

The Tribunal allowed the additional ground for ESOP expenditure to be adjudicated by the Assessing Officer (AO) due to lack of factual matrix on record. The deduction for education cess was already allowed for AY 2007-08 and directed to be allowed for AY 2008-09.

The assessee, Bajaj Electricals Limited, had raised additional grounds regarding deduction for Employee Stock Option Plan (ESOP) expenditure and education cess. These grounds were not adjudicated in the original appeal order.

What were the issues?

Whether additional grounds of appeal, not adjudicated in the original order, can be admitted and adjudicated. The specific issue of deduction for ESOP expenditure requires factual determination by the AO.

Bajaj Electricals Ltd vs Addl CIT 2(1) | ITAT Mumbai 2021

Income Tax Appellate Tribunal, “B” BENCH, MUMBAI

Before: HON’BLE SHRI MAHAVIR SINGH, VP & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM

For Appellant: Shri Nitesh Joshi -Ld.AR

For Respondent: Shri Rahul Raman -Ld.CIT-DR

आयकरअपील सं./ (िनधा�रण वष� / Assessment Year: 2008-09) Bajaj Electricals Limited Addl. CIT-2(1) बनाम/ 45/47, Bombay Life Building Aaykar Bhavan, M.K. Road Veer Nariman Road Mumbai-400 020. Vs. Fort, Mumbai-400 001. �थायीलेखासं./जीआइआरसं./PAN/GIR No. AAACB-2484-Q (अपीलाथ�/Appellant) (��थ� / Respondent) : Assessee by : Shri Nitesh Joshi -Ld.AR Revenue by : Shri Rahul Raman -Ld.CIT-DR सुनवाई की तारीख/ : 23/02/2021 Date of Hearing घोषणा की तारीख / : 03/03/2021 Date of Pronouncement आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid matter is a recalled matter for limited purpose of adjudication of one of the additional ground raised by the assessee in its appeal for Assessment Year (AY) 2008-09. The appeal was originally disposed-off vide order dated 14/10/2019 which is common order for Cross Appeals for AYs 2007-08 & 2008-09. However, the assessee’s miscellaneous application MA No. 223/Mum/2020 has been allowed by Bajaj Electricals Limited Assessment Year: 2008-09 the Bench vide order dated 08/01/2021 for limited purpose of adjudication of additional grounds of appeal as raised by the assessee during the course of original hearing. The observations of the bench, recalling the order, read as under: -

6. By virtue of this Miscellaneous Application, the assessee submits that the additional grounds raised by the assessee on account of claiming deduction of expenditure in respect of Employee Stock Option Plan (ESOP) and deduction in respect of education cess were not at all adjudicated by this Tribunal while disposing off its appeal. Non adjudication of additional grounds would constitute mistake apparent on record warranting rectification u/s. 254(2) of the Act.

7. We have heard the rival submissions and perused the materials available on record. We find that the additional grounds raised on the aforesaid two issues for A.Y.2008-09 have not been adjudicated by this Tribunal while disposing off the original appeal which is amenable to rectification u/s.254(2) of the Act.

8. With regard to deduction claimed in respect of education cess, we have already held for the A.Y.2007-08 in this order supra that the assessee would be entitled for deduction in respect of education cess. We direct the ld. AO accordingly to grant deduction for the same for A.Y.2008-09 also.

9. With regard to deduction claimed in respect of Employee Stock Option Expenditure, since the said issue was not at all adjudicated by the Tribunal, we hereby recall the order passed by this Tribunal for A.Y.2008- 09 only for the limited extent of adjudication of this additional ground alone.

Accordingly, the issue of deduction of Employee Stock Option expenditure (ESOP) has come up for fresh hearing before this bench.

The Ld. CIT-DR, at the outset, objected to admission of additional ground and submitted that the facts of the same are not available in the assessment order as well as in the appellate order. The Ld. AR, on the other hand, submitted that this issue was raised by the assessee vide its letter dated 04/12/2018 whereas the appeal was originally heard on 20/08/2019. This ground, though admitted and argued, was not adjudicated by the bench which led the assessee to prefer miscellaneous application against the order and finding merit in the same, the miscellaneous application was allowed by the bench.

Upon due consideration of material on record, we find that the assessee had, in fact, raised the issue of deduction of education cess as Bajaj Electricals Limited Assessment Year: 2008-09 well as deduction of expenditure incurred in respect of Employee Stock Option Plan (ESOP) by way of additional ground of appeal

vide letter dated 04/12/2018. These two grounds remained to be adjudicated in Tribunal order dated 14/10/2019. In the MA order, the bench noted the aforesaid fact and allowed the ground of deduction of education cess but recalled the order for the purpose of adjudicating ground related to deduction of ESOP expenditure. Therefore, it is quite evident that the issues were admitted as well as argued during the hearing of original appeal, though not adjudicated in the order. Therefore, the objection raised by Ld. CIT-DR as to admission of additional ground of appeal stand rejected.

4. Proceeding further on the merit of the case, upon perusal of assessment order as well as appellate order, we concur with the submission of Ld. CIT-DR that the factual matrix with respect to issue of deduction of ESOP expenditure is not available on record and the same was not subject matter of assessment framed by Ld. AO for the year under consideration. Accordingly, while admitting this ground of appeal, we restore the same back to the file of Ld. AO to consider the factual matrix of the same and adjudicate the issue after providing due opportunity of hearing to the assessee. The assessee, in turn, is directed to substantiate his claim accordingly.

Bajaj Electricals Limited Assessment Year: 2008-09 5. The additional ground thus raised stand allowed for statistical purposes. The appeal of assessee remains partly allowed as indicated in the original order. Order pronounced on 03rd March, 2021 Sd/- Sd/- (Mahavir Singh) (Manoj Kumar Aggarwal) उपा�� / Vice President लेखा सद� / Accountant Member मुंबई Mumbai; िदनांक Dated : 03/03/2021 Sr.PS, Jaisy Varghese आदेशकी�ितिलिपअ�ेिषत/Copy of the Order forwarded to : अपीलाथ�/ The Appellant 1. ��थ�/ The Respondent 2. आयकरआयु�(अपील) / The CIT(A) 3. आयकरआयु�/ CIT– concerned 4. िवभागीय�ितिनिध, आयकरअपीलीयअिधकरण, मुंबई/ DR, ITAT, Mumbai 5. गाड�फाईल / Guard File 6. आदेशानुसार/ BY ORDER,

BAJAJ ELECTRICALS LTD,MUMBAI vs. ADDL CIT 2(1), MUMBAI

What did the Tribunal hold?

What were the facts?

What were the issues?

Which sections of the Income-tax Act were involved?

Recent GST High Court judgments