The amount received by the employee as a one – time voluntary payment in lieu of ESOPs of foreign parent of the employer do not form part of salary under Section 17
The voluntary payment was not arising out of any statutory or contractual obligation but was provided for the compensation for loss in current value or any potential losses on account of future accretion to the ESOP holders.
This is observed by the Delhi High Court in the case of Sanjay Baweja v. DCIT (W.P.C) 11155/2023) decided on 30.05.2024.
The Hon’ble Court relied upon the following precedents:
~ Empire Jute Co. Ltd. v. CIT (1980) 4 SCC 25
~ Shrimant Padmaraje R. Kadambande v. CIT (1992) 3 SCC 432
~ Godrej and Co. v. CIT (1959) SCC OnLine SC 101
~ Empire Jute Co. Ltd. v. CIT (1980) 4 SCC 25
~ CIT v. Saurashtra Cement Ltd. (2010) 11 SCC 84
The copy of the order is as under:
