COMMR.OF INCOME TAX,BANGALORE vs M/S INFOSYS TECHNOLOGIES LTD.

The Supreme Court addressed the applicability of Section 192 of the Income Tax Act, 1961 regarding tax deduction on stock options granted to employees. The Court upheld the Tribunal's decision that the right to participate in the Employees Stock Option Scheme (ESOP) does not constitute a 'perquisite' under Section 17(2)(iii) of the Act, thus negating the demand for TDS on the difference between market value and exercise price. The Court confirmed the Karnataka High Court's ruling, concluding that the respondent-assessee was not liable for TDS on the stock options granted to employees.