Assessee had debited a certain sum towards ESOP expenses and as cost borne by assessee was in connection with providing incentive through stock options-related benefits to employees, expenses incurred by it were claimed as a deduction under section 37(1). Assessing Officer disallowed deduction primarily on basis that expenditure incurred was not real expenditure and was notional in nature Held that since discount on issue of ESOPs i.e., difference between grant price and market price of shares as on date of grant of options is allowable as a deduction under section 37(1), disallowance made by Assessing Officer was to be deleted. (AY. 2009-10, 2012-13)