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Facts
The Revenue appealed against the CIT(A)'s order for Assessment Year 2013-14, challenging the restriction of disallowance under Section 14A r.w. Rule 8D, deletion of addition for software depreciation, and allowance of ESOP expenses. The CIT(A) had restricted the disallowance and allowed the ESOP expenses, while deleting the addition for software depreciation.
Held
The Tribunal relied on its previous orders concerning the same assessee, holding that no valid satisfaction was recorded by the AO under Section 14A(2) for the disallowance and that software expenses, being linked to computers, were allowable. Consequently, the Revenue's grounds were rejected.
Key Issues
Whether the CIT(A) erred in restricting Section 14A disallowance, deleting depreciation on software, and allowing ESOP expenses? Whether the Tribunal's previous decisions on similar issues for the assessee apply?
Sections Cited
14A, 8D, 143(3), 14A(2)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘C’, NEW DELHI
Before: Sh. Satbeer Singh Godara & Sh. Manish Agarwal
Asstt. Year: 2013-14 ACIT, Vs Indiabulls Real Estate Ltd., M-62 & 63, 1st Floor, Connaught Central Circle-6 4 Mumabi-40051 Place, New Delhi-110001 (APPELLANT) (RESPONDENT) PAN No. AABCI5194F Assessee by : Sh. Ankit Kumar, Adv. Revenue by : Sh. Om Prakash, Sr. DR Date of Hearing: 29.09.2025 Date of Pronouncement: 14.11.2025 ORDER
Per Satbeer Singh Godara, Judicial Member:
This Revenue’s appeal for Assessment Year 2013-14, arises against the CIT(A)-22, New Delhi’s in case No. 173/18- 19/CIT(A)-22, New Delhi dated 30.04.2019, in proceedings u/s 143(3) of the Income Tax Act, 1961 (in short “the Act”).
Heard both the parties at length. Case file perused.
The Revenue pleads the following substantive grounds in the instant appeal:
“1. On the facts and circumstances of the case and in law, the ld. CIT(A) has erred in restricting the disallowance under Section 14A r.w. Rule 8D to the extent of Rs.1,18,44,320/- as against the sum of Rs.5,16,73,689/- worked out by the A.O.?
2. On the facts and circumstances of the case and in law, the ld. CIT(A) has erred in deleting the addition of Rs.43,01,604/- made by the AO on account of disallowance of excess claim of depreciation on software expenses? 3. On the facts and circumstances of the case and in law, the ld. CIT(A) has erred in allowing the additional claim of the assessee on account of Employees Stock Option Scheme compensation (ESOP expenses) amounting to Rs.96,248/-?”
Coming to the first and foremost islsue of section 14A r.w. Rule 8D disallowance which has been partly confirmed in the learned CIT(A)’s order, it emerges during the course of hearing this tribunal’s learned co-ordinate bench order in the assessee’s appeal has already settled the issue against the department thereby holding that no valid satisfaction qua it’s books of account had been recorded u/s 14A(2) of the Act. We thus adopt judicial consistency to reject the Revenue’s first and foremost substantive ground in very terms therefore.
The Revenue’s second substantive ground herein seeks to revive the Assessing Officer’s action disallowing the assessee’s excess depreciation claim representing software expenses. It could hardly dispute that this tribunal learned co-ordinate bench in assessee’s case itself in assessment year 2012-13 involving has already decided the same against the department thereby holding that the software in question
Lastly comes the Revenue’s third substantive ground seeking to revive ESOP expenditure disallowance of Rs.96,248/- as deleted in the lower appellate discussion. Both the parties are again very fair in forming or that the tribunal’s above learned co-ordinate bench in assessment year 2012-13 has already rejected the Revenue’s very arguments in light of CIT Vs. Biocon Ltd. (2021) 131 taxmann.com 188 (SC) thereby treating the impugned claim of “ESOP” as an allowable revenue expenditure. Rejected accordingly.
All other ground or argument has not been pressed before us.