TMI Blog2016 (6) TMI 791X X X X Extracts X X X X X X X X Extracts X X X X ..... employees incurred by the assessee is business expense under Section 37 of the Income Tax Act, 1961. - Decided in favour of assessee - I.T.A No. 2034/Kol/2013 - - - Dated:- 18-5-2016 - Shri N. V. Vasudevan, JM And Shri M. Balaganesh, AM For the Appellant: S/Shri K. M. Gupta, AR, B.K. Jain Alpesh Gupta For the Respondent: Shri T. K. Neogi, JCIT, Sr. DR ORDER Per Shri M. Balaganesh, AM This appeal by assessee is arising out of order of CIT(A)-XX, Kolkata vide Appeal No. 149/CIT(A)-XX/Circle-2/2011-12/Kol dated 01.02.2013. Assessment was framed by ACIT, Circle-2, Kolkata u/s. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as the Act ) for Assessment Year 2004-05 vide his order dated 28.12.2006. 2. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entitled to such benefit. The activities undertaken by employees in such social clubs are in the nature of business meetings, dealings and business gatherings between prospective customers and/or senior executives of the assessee company, which mainly caters to the business interest of the company. These are purely for the purpose of the business. It may be appreciated that in a consultancy firm it is obvious that certain prospective clients are asked for lunch or dinner at reputed clubs because of its ambience and privacy. Although the Ld. AO inferred that such expenditure are incurred are purely personal in nature, it cannot be denied that the Ld. AO had no material on record in bringing such allegation. He argued that the tax auditor an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent to health clubs as membership subscription is allowable business expenditure. He also argued that the Act does not prescribe any disallowance on entertainment and travelling expenses. Sections 37(2) and Section 37(3) of the Act imposed certain restrictions on the allowance of entertainment and travelling expenditure. Both such sections have been withdrawn from the statute vide Finance Act 1997, with effect from 1st April, 1997. On the other hand, Ld. DR vehemently supported the orders of the lower authorities. 5. We have heard rival submissions and perused the material available on record. We find from the details of club expenses filed, the Ld. AO had allowed the club expenses incurred by the assessee in various clubs situated in Ko ..... X X X X Extracts X X X X X X X X Extracts X X X X
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