Principal Commissioner of Income Tax 2, Kolkata v. Bandhan Bank Ltd.

1. FACTS OF THE CASE

After condoning Revenue’s 117-day filing delay, the Court considered its challenge to the Tribunal’s 27 March 2023 order in ITA 370/Kol/2022 for AY 2017-18. The disputed addition concerned ESOP cost.

Source: PDF pp.1–2

2. DISCUSSION BY THE COURT

Revenue characterised ESOP expenditure as notional and capital. The Court considered the issue covered for the assessee by PVP Ventures, Lemon Tree Hotels and Biocon, which the Tribunal had also relied upon.

Source: PDF p.2

3. JUDICIAL DECISION

The Court sustained deduction under section 37(1), describing the employee-service and profit-earning purpose recognised in those authorities, and found no ground to interfere.

Source: PDF p.2

4. OUTCOME

Revenue appeal dismissed; the substantial question answered against Revenue.

Source: PDF p.3

5. Expert Comments

AKHB editorial analysis, distinct from the Court’s findings.

The employee-service purpose answered the capital objection

The Court treated the expenditure through its connection with securing employee services and earning profits. Its reasoning rejects the notional/capital objection raised in this appeal. A comparable claim should establish the employment purpose and the relevant scheme, rather than assume that the presence of shares makes expenditure either automatically capital or automatically deductible.

Source: PDF p.2

Allowance does not settle every computation question

The short judgment supplies no scheme terms, vesting schedule, valuation calculation, forfeiture adjustment or rupee amount. It supports the deduction issue decided, not a particular measurement or timing method absent from the source. Those matters require the relevant records and authorities rather than an invented extension of this order.

Source: PDF pp.1–3

Separate condonation and historical precedent status

The Court accepted the explanation for the 117-day delay and then dismissed the appeal on the legal issue. Its observation that the cited decisions appeared not to have been appealed records the position considered then; it is not independent verification of their present appellate status or later treatment.

Source: PDF pp.1–3