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2016 (1) TMI 1414 - AT - Income TaxRevision u/s 263 - AO failed to examine as to whether the conditions specified in sec. 37(1) were satisfied or not in the claim so made by the assessee - Claim of club membership fee - HELD THAT - Assessee s explanation that the club membership fee was paid for a representative of the assessee was accepted by the AO on the face of it. The documents furnished along with the reply letter furnished by the assessee clearly show that the membership fee was paid for Mrs. Lata Vasvani. There should not be any dispute that the club membership fee was allowed u/s 37(1) of the Act where in there is a requirement to show that the expenditure was incurred for the purpose of business it was not personal expenditure or capital expenditure etc. We notice that Mrs. Lata Vasvani was not an employee or a director of the assessee company. She was not paid any other kind of compensation from the funds of the company. Normal business practice is to take the membership in the name of the company or in the name of top employees as per their service terms and conditions. Hence in our view the assessing officer has failed to apply his mind on the reply given by the assessee. The assessing officer in our view has failed to examine as to whether the conditions specified in sec. 37(1) were satisfied or not in the claim so made by the assessee. Accordingly we are of the view the present case is a case of lack of enquiry on the claim made by the assessee. In the absence of required enquiry it cannot be said that the assessing officer has taken one of the possible views. Accordingly we are of the view that there is no infirmity in the action of the Ld CIT in initiating the revision proceedings u/s 263 of the Act. - Decided in favour of assessee.
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