UK-based Indian employee wins tax case over ESOP shares: ITAT Mumbai rules in favour

• ITAT Mumbai ruled in favour of a UK-based Indian employee, Hemrajani, allowing him to use the fair market value of ESOP shares as the cost of acquisition for tax purposes, despite the Income Tax Department's challenge.
• Hemrajani had exercised 1,540 ESOPs of L&T Infotech at Re 1 each (fair market value: ~Rs 1,754/share) and sold them for Rs 25.99 lakh, claiming a Rs 1 lakh short-term capital loss.
• The tax department had treated the sale as unexplained gains of Rs 29.59 lakh.

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