Novartis Healthcare Private Limited vs DCIT

Parties Involved

Facts Summary

This appeal by the Revenue and cross-objection (C.O.) by the assessee are directed against the order of ld. CIT (A) dated 26.09.2025 for assessment year 2021-22. The Revenue has raised several grounds of appeal concerning the nature of the relationship between the assessee company and its stockists, and the timing of tax deduction on Employee Stock Ownership Plan (ESOP) benefits. The assessee, in its cross-objection, raised similar grounds. Both parties submitted their rival contentions and relied on previous decisions of the Tribunal and High Court.…

Legal Issues

• 1. Whether the transaction between the assessee company and its stockists was on a principal-to-principal basis.
• 2. Whether the assessee company controlled all aspects of the business relationship with its stockists.
• 3. Whether the stockists were functioning as agents of the assessee company.
• 4. Whether tax on ESOP benefits is deductible only at the time of exercise of options by the employees.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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