https://www.taxtmi.com/caselaws?id=401024 Whether ESOP discount is deductible under s.37(1) was the dominant issue. The HC held that "expenditure" includes loss; issuing shares at a discount, with the employer absorbing the difference between market value at grant and offer price, constitutes employee remuneration incurred to secure continued service and cannot be treated as a short receipt of capital. Applying mercantile accounting and SEBI ESOP Guidelines, the discount is allowable over the vesting period as a definite liability, and consistency principles barred the Revenue from taking a contrary stand where deduction was allowed in later years. Revenue's appeal was dismissed and deduction upheld. en-us Wed, 11 Nov 2020 00:00:00 +0530 Fri, 02 Jan 2026 11:08:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=401024 Whether ESOP discount is deductible under s.37(1) was the dominant issue. The HC held that "expenditure" includes loss; issuing shares at a discount, with the employer absorbing the difference between market value at grant and offer price, constitutes employee remuneration incurred to secure continued service and cannot be treated as a short receipt of capital. Applying mercantile accounting and SEBI ESOP Guidelines, the discount is allowable over the vesting period as a definite liability, and consistency principles barred the Revenue from taking a contrary stand where deduction was allowed in later years. Revenue's appeal was dismissed and deduction upheld. Case-Laws Income Tax Wed, 11 Nov 2020 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=401024