The commissioner of Income Tax-IV, Hyderabad vs. M/s. Lanco Infratech Ltd.,

1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 17TH DAY OF DECEMBER 2020 PRESENT THE HON’BLE MR. JUSTICE ALOK ARADHE AND THE HON’BLE MR. JUSTICE H.T.NARENDRA PRASAD I.T.A. NO.436 OF 2014 BETWEEN: 1. THE COMMISSIONER OF INCOME-TAX

LTU, JSS TOWERS

BSK III STAGE, BANGALORE. 2. THE DEPUTY COMMISSIONER OF INCOME-TAX

LTU, JSS TOWERS

BSK III STAGE, BANGALORE-560085. .... APPELLANTS (BY SRI. K.V. ARAVIND, ADV.,) AND: M/S. BIOCON LTD., 20TH KM, HOSUR ROAD ELECTRONIC CITY BEBBAGODI BANGALORE-560100. ... RESPONDENT (BY SMT. MANASA ANANTHAN, ADV., & SRI. T. SURYANARAYANA, ADV.,) - - - THIS I.T.A. IS FILED UNDER SEC. 260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 30.04.2014 PASSED IN ITA NO.1206/BANG/2010 FOR THE ASSESSMENT YEAR 2007-08 PRAYING TO: (i) FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE.

2 (ii) ALLOW THE APPEAL AND SET ASIDE THE ORDER PASSED BY THE ITAT, BANGALORE IN ITA NO.1206/BANG/2010 DATED 30.04.2014 AND CONFIRM THE ORDER OF THE APPELLATE COMMISSIONER CONFIRMING THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-11(2), BANGALORE. THIS I.T.A. COMING ON FOR HEARING, THIS DAY, ALOK ARADHE J., DELIVERED THE FOLLOWING: JUDGMENT Mr.K.V.Aravind, learned counsel for the revenue. Smt.Manasa Ananthan, learned counsel for the assessee. 2. This appeal under Section 260-A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’, for short) has been filed by the revenue. The subject matter of the appeal pertains to the Assessment Year 2007-08. The appeal was admitted by a Bench of this Court vide order dated 01.06.2015 on the following substantial questions of law: "1. Whether on the facts and in the circumstances of the case and in law the Tribunal was right in holding that the discount on issue of ESOP is allowable deduction in computing the income under the head profits and gains of the business?

3 2. Whether on the facts and in the circumstances of the case and in law the Tribunal was right in holding that difference between market price of the shares at the time of grant of option and offer price amounts to discount and the same has to be treated as remuneration to the employees for their continuity of service? 3. Whether on the facts and in the circumstances of the case and in law the Tribunal committed an error in not examining the scheme of ESOP from which it is clear that the employees will not get any right in the shares till completion of the period prescribed and the expenditure claimed is contingent and recorded perverse finding? 4. Whether on the facts and in the circumstances of the case and in law the tribunal was correct in holding that the discount on issue of ESOP is allowable deduction under section 35(2AB) of the Act? . 5. Whether on the facts and in the circumstances of the case and in law the tribunal was correct in holding that the unabsorbed depreciation of non 10B unit cannot be set off against the income of the

4 10B unit without taking into consideration the amendment to section 10B of the Act?". 3. Learned counsel for the assessee submits that the substantial questions of law involved in this appeal have already been answered against the revenue by a judgment of this Court dated 11.11.2020 passed in ITA No.653/2013. The aforesaid submission could not be disputed by the learned counsel for the revenue. 4. In view of the aforesaid submission and for the reasons assigned by this Court in ITA No.653/2013 in the judgment dated 11.11.2020, the substantial questions of law framed in this appeal are answered against the revenue. In the result, we do not find any merit in the appeal. The same fails and is hereby dismissed. Sd/- JUDGE Sd/- JUDGE RV