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2022 (6) TMI 940 - AT - Income TaxBusiness expenditure allowable u/s. 37(1) - whether expenses incurred by the assessee are claimed as deductable which are incurred in the course of business towards club membership or whether they are in respect of availing of services and facilities at the club? - HELD THAT:- Section 37(1) of the Act provides that expenditure incurred which are fully and exclusively for the purpose of business are to be allowed. Accordingly, we find it proper to remit the matter back to the file of the Ld. AO for the limited purpose of verification of these expenses claimed by the assessee as club membership and subscription expenses for the purpose of allowability. AO is directed to ascertain under which bucket these expenses fall as referred in (i) & (ii) of para 9 above. Based on his examination and verification and categorization of expenses in each of the two bucket referred above, the amount of expenses incurred in respect of club membership and subscription fees only shall be allowed as business expenditure u/s. 37(1) of the Act. Needless to say, the assessee be given reasonable opportunity of being heard and be at liberty to make all of its submissions to justify its claim. Accordingly, the appeal of the assessee is allowed for statistical purposes.
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