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Recently, the Bangalore Bench of the Income-tax Appellate Tribunal (the Tribunal) in the case of Novo Nordisk India Pvt. Ltd. held that expenditure incurred by an Indian company on the issue of shares of foreign parent company under the Employees Stock Option Plan is allowable as revenue expenditure. The Tribunal observed that the expenditure is not capital in nature since it was incurred to compensate employees for continuity of service. Therefore, it would be allowed as revenue expenditure.