In Brief
A Chairman and Managing Director of an Indian subsidiary of a US company received cash on redemption of Stock Appreciation Rights (SARs) granted by the parent company in 1991-96, claimed as non-taxable. The Revenue sought to tax it as a perquisite under the Income Tax Act. The Supreme Court dismissed the Revenue's appeal, holding that absent an express statutory provision making such receipt taxable, the employee cannot be subjected to tax. The amendment of 1999 defining and taxing such security transfers applied only from 2000 onwards and cannot operate retrospectively. Therefore, the amount received in 1997 was not taxable as income.
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