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2012 (7) TMI 798 - HC - Income TaxDisallowance of corporate membership fees - revenue in nature or capital? - Held that:- The club membership enable the nominated executives to meet people and develop relationship for smooth conduct of day to day business. The Tribunal followed its order for the Assessment year 1998-99 in respondent's own case where both entrance and renewal fees paid for club membership were allowed as revenue expenditure and as the earlier order of the Tribunal has not been challenged by the revenue no reason why the renewal membership fees should not be allowed as revenue expenditure - against revenue. Disallowance of excess provision on account of free service provided - Held that:- Quantification of the provision as done on the basis of the unencashed valid coupons was on a reasonable and consistent basis - the provision is of a estimate and if subsequently the same is found to be in excess then the excess is added back and offered to tax. Further, this has been a practice followed by the respondent assessee and accepted by the department for many years - against revenue. Depreciation in respect of telephone trolleys, furniture and equipment as plant and machinery in factory - Held that:- The issue is settled by the Tribunal in the earlier year in respect of the same assessee and the revenue has not been able to point out any change in the circumstances. Appeal admitted only on deleting disallowance by ITAT being expenses incurred by the assessee on account of taxes and fees not pertaining to year under consideration.
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