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2015 (12) TMI 822 - ITAT AHMEDABAD

2015 (12) TMI 822 - ITAT AHMEDABAD - TMI - Disallowance on account of entrance fees u/s.37 - CIT(A) deleted the addition - Held that:- CIT(A) while deleting the addition has given a finding that the payment of entrance fees to the club was incurred for the purpose of business and was for smooth and efficient running of business enterprises and that the expenditure was wholly and exclusively for the purpose of business. Before us, Revenue has not brought any material on record to controvert the f .....

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the method of accounting followed by the Assessee in respect of warranty provisions is consistent and is based on definite scientific method and that the provision of warranty made by the Assessee was not a contingent liability. Before us, Revenue could not controvert the findings of ld. CIT(A) and we therefore find no reason to interfere with the order of ld. CIT(A) and thus the ground of Revenue is dismissed.- Decided against revenue. - I.T.A. No.2724 /AHD/2011 - Dated:- 13-8-2015 - SHRI RAJPA .....

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led its return of income for A.Y. 2008-09 on 30.09.2008 declaring total income of ₹ 12,11,95,820/-. The case was selected for scrutiny and thereafter the assessment was framed under section 143(3) vide order dated 18.10.2010 and the total income was determined at ₹ 12,31,94,908/-. Aggrieved by the order of A.O., Assessee carried the matter before ld. CIT(A) who vide order dated 04.08.2011 granted substantial relief to the Assessee. Aggrieved by the aforesaid order of ld. CIT(A), Reve .....

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cement & warranty charges u/s. 37 of the Act. 1st ground is with respect to deletion of ₹ 2,81,900/- on account of Entrance fees 4. During the course of assessment proceedings, A.O noticed that Assessee has paid ₹ 2,81,900/- as Entrance fees to Noida Golf Course Society to obtain corporate membership. A.O was of the view that the expense is not allowable u/s. 37 of the Act and accordingly disallowed the same. Aggrieved by the order of A.O., Assessee carried the matter before ld. .....

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d for the purpose of business. This is an expenditure in the nature of welfare expenditure incurred for the recreation of the employees by the appellant company. It is for smooth and efficient running of business enterprise and it is a common practice across the globe to provide such facilities to the senior employees of the company. Therefore, the admission fee paid towards corporate membership is expenditure wholly and exclusively for the purpose of business and the addition made by the A. O. .....

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e addition has given a finding that the payment of entrance fees to the club was incurred for the purpose of business and was for smooth and efficient running of business enterprises and that the expenditure was wholly and exclusively for the purpose of business. Before us, Revenue has not brought any material on record to controvert the findings of ld. CIT(A). We therefore find no reason to interfere with the order of ld. CIT(A) and thus the ground of Revenue is dismissed. 2nd ground is with re .....

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ent and that the provision was based on the past experience of the Assessee. The submission of the Assessee was not found acceptable to the A.O as he was of the view that the provision for warranty expenses was of contingent nature. He accordingly denied the claim of deduction. Aggrieved by the order of A.O., Assessee carried the matter before ld. CIT(A) who deleted the addition by holding as under:- 6.3 I have carefully considered the assessment order and the submission filed by the appellant. .....

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llant. The warranty expenses form an integral part of the sale of shelters. The method of accounting followed by the appellant in respect of the warranty provision is also consistent and is based on definite scientific method. The appellant makes a provision for the warranty on account of sales affected during the year and the provision which was made in the last year but part of which was not utilized as there was no claim, is reversed or written back in the company profit & loss account. T .....

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