O R D E R

PER SANDEEP SINGH KARHAIL, JUDICIAL MEMBER:

The Revenue has filed the present appeals against the separate impugned orders of even date 09.12.2025 passed u/s 250 of the Income Tax Act, 1961 (in short “The Act”) by the ld. CIT(A), National Faceless Appeal Centre, Delhi (“ld. CIT(A)”), for the assessment years 2018-19 & 2021-22.

2. Since both the appeals pertain to the same assessee involving similar issues arising out of the similar factual matrix, these appeals were heard together as a matter of convenience and are being decided by way of this consolidated order. With the consent of the parties, the Revenue’s appeal for the assessment year 2018-19 is considered as a lead case, and the decision rendered therein shall apply mutatis mutandis to the other appeal.

3. In its appeal for the assessment year 2018-19, the Revenue has raised the following revised grounds of appeal: -

1. “The order of the Ld. CIT(A) dated 09/12/2025 for A.Y. 2018-19 is opposed to law and facts of the case.

2. On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in allowing the deduction on account of ESOP expenditure, ignoring the detailed findings recorded by the Assessing Officer that the alleged expenditure was merely a notional accounting entry without any actual outflow of funds.

3. The learned CIT(A) has erred in holding that the discount on issue of shares under the ESOP scheme constitutes allowable revenue expenditure, without appreciating that such discount represents short receipt of share premium, which is capital in nature and therefore not allowable as deduction under the provisions of the Income-tax Act, 1961.

4. The order of the learned CIT(A) is erroneous in law and on facts, as it disregards the settled principle that share capital and share premium are capital receipts, and any shortfall therein cannot be treated as allowable business expenditure.

5. The learned CIT(A) has erred in relying upon the judgment of the Hon'ble Karnataka High Court in the case of CIT v. Biocon Ltd. (430 ITR 151), without appreciating that the said decision has not been accepted by the Department on merits and the issue has not attained finality.

6. The learned CIT(A) has failed to appreciate that the Department has filed SLP before the Hon'ble Supreme Court on the identical issue in the case of PCIT v. Lemon Tree Hotels Pvt. Ltd., which has been admitted and is pending adjudication.

7. On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in deleting the disallowance made by the Assessing Officer under section 14A f the Income-tax Act, 1961, without properly appreciating the facts and findings recorded in the assessment order.

8. The ld. CIT(A) has erred in holding that no disallowance under section 14A can be made in the absence of exempt income during the relevant previous year, without appreciating that the assessee had made substantial investments in Mutual Funds which are capable of yielding income not forming part of total income.

9. The appellant craves leave to add, alter, amend or withdraw any of the above grounds of appeal at or before the time of hearing.”

4. Ground No.1 is general in nature and therefore needs no separate adjudication.

5. Ground Nos.2 to 6, raised in Revenue’s appeal, pertain to the deletion of disallowance made on account of Employee Stock Option Plan (“ESOP”) expenses.

6. We have considered the submissions of both sides and perused the materials available on record. The brief facts pertaining to this issue are that the assessee is an internet-based Website/App, which helps connect owners and seekers of properties with each other, without the involvement of any broker. In the assessment year 2018-19, the assessee filed its return of income on 29.09.2018. The return filed by the assessee was selected for scrutiny, and statutory notices u/s 143(2) & 142(1) of the Act were issued and served on the assessee. During the assessment proceedings, it was n