Legal Reference Library

In Religare Commodities Ltd vs. ACIT, ITAT Delhi held that Stock Options (appreciation rights) are intended to motive employees and so the expenditure thereon is a deductible revenue expenditure. The discount (difference between market price and vesting price) is allowable upon vesting subject to reversal if the options lapse. Article referred: http://itatonline.org/archives/religare-commodities-ltd-vs-acit-itat-delhi-s-371-stock-options-appreciation-rights-are-intended-to-motive-employees-and-so-the-expenditure-thereon-is-a-deductible-revenue-expenditure-the-disco/

In IndiaBulls Financial Services Ltd vs. DCIT, the Hon'ble Delhi High Court, while hearing the appeal  against order of the Appellant Tribunal decided that The fact that the AO did not expressly record his dissatisfaction with the assessee's working under Section 14A and Rule 8D of the IT Act does not mean that he cannot make the disallowance. The AO need not pay lip service and formally record dissatisfaction. It is sufficient if the order shows due application of mind to all aspects.

The Bombay High Court last week ruled that expenses incurred by a professional going abroad for treatment of eye is not eligible for income tax deduction. The assessee in this case, Dhimant Thakar vs CIT, was a lawyer and he argued that good vision was important for pursuing his profession. His claim for the assessment year 1986-87 was rejected by the revenue authorities. His appeal was also rejected by the Commissioner of Income Tax (Appeals) who observed that if the logic of the lawyer was stretched, it would mean that even expenditure incurred on food to preserve oneself should be treated as allowable under Section 37(1) of the Income Tax Act as being incurred for business or profession. On appeal, the high court upheld the view of the authorities observing that "eyes are essential not only for the purpose of business or profession but for purposes other than these which are so many. It is therefore clear that the said expenditure as claimed by the professional is not in th...