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2023 (6) TMI 1064 - AT - Income TaxDeduction of club membership fees paid to Cricket Club of India - Membership in the name of Director - Business Expenditure or not - Business was closed / wounded up as the company was converted to LLP - HELD THAT:- The facilities of the Club would be utilized by the director/partner for meeting and interacting with other members of Cricked Club of India and thus would ultimately benefit the assessee (even though converted to LLP). The Kolkata Tribunal in the case of M/s. MKJ Tradex Ltd [2018 (3) TMI 1172 - ITAT KOLKATA] has succinctly described the advantage of assessee company/its employees becoming members of a club which is not repeated again for the sake of brevity. Since the assessee company functions through the director/share-holders and even though converted to LLP, still will be functioning through the key persons; and it is noted that membership was for Shri. Anand Didwania, who was a director & later partner of LLP and so, is a key person of assessee company/LLP. So entrance fees paid by the assessee on behalf of Shri Anand Didwania for becoming member of the Cricket Club of India would inure benefits for the business of the assessee/LLP. And therefore, in the light of decision in the case of United Glass MFG Co. Ltd. [2012 (9) TMI 914 - SUPREME COURT] it is held to be an allowable deduction in the facts and circumstances of this case. Therefore, AO is directed to delete addition - Appeal of the assessee is allowed.
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