Case Law Analysis
|Income Tax Appellate Tribunal
ESOP Discount Is Revenue Expenditure Under Section 37(1) | ITAT Delhi Affirms Binding Precedent of Delhi HC in Lemon Tree & NDTV Cases
The ITAT Delhi has ruled that the discount on shares issued under Employee Stock Option Plans qualifies as a revenue expenditure deductible under Section 37(1) of the Income Tax Act, aligning with Delhi High Court precedents in Lemon Tree Hotels and NDTV. This clarifies that such accounting entries-though non-cash-are legitimate business costs tied to employee compensation, not capital infusions, impacting all companies offering ESOPs in India.