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2022 (1) TMI 38 - AT - Income TaxDisallowance u/s 37(1) expenses towards fees, subscription and payment of services for various clubs such as Karnataka Golf Association, Bangalore Club, the Karnataka Cricket Association Club House - assessee stated that those expenses were incurred for entertaining the guest of the assessee to promote its business - AO did not accept the explanation of the assessee and made the disallowance u/s 37(1) by treating it to be personal in nature - HELD THAT:- In the present case also the assessee has incurred the expenses on account of club membership fees for the employees and to entertain customers. An identical issue the Hon’ble Madras High Court in the case of CIT Vs. Sundaram Industries Ltd [1999 (4) TMI 50 - MADRAS HIGH COURT] wherein as held that assessee-company had incurred the expenditure wholly and exclusively for the purpose of its business and therefore the expenditure incurred by way of subscription to the club was an allowable expenditure. Also see UNITED GLASS MFG CO. LTD. [2012 (9) TMI 914 - SUPREME COURT] wherein held that club membership fees for employees incurred by the assessee is business expense under Section 37 - Decided in favour of assessee.
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