TMI Blog2020 (4) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... sed after taking membership in the club. Considering the turnover, the membership fees is very negligible and it can never be treated as capital assets having enduring benefit. It may give benefit of utilizing the club facilities, but cannot create any right of endurance /right of possession. - Decided in favour of assessee. - I.T.A. No. 5352/Mum/2018 - - - Dated:- 8-1-2020 - Shri S. Rifaur Rahman, AM And Shri Ravish Sood, JM For the Appellant : Dr. P. Daniel, AR For the Respondent : Shri V. Vinod Kumar, DR ORDER PER S. RIFAUR RAHMAN (ACCOUNTANT MEMBER): The present appeal has been filed by the assessee against the order of Ld. Commissioner of Income Tax (Appeals)-2, Mumbai, in short Ld. CIT(A) dated 15.06.18 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mann.com299 After considering Apex Court decision in the case of- CIT v/s. United Glass Glass Mfg. Co. Ltd [Civil Appeal No. 6447 to 6449 of 2012, dated 12.09.2012] There is no specific provision in the Income Tax Act for allowing or disallowing the claim of an assessee for deduction of expenses. Hence, question of admissibility or inadmissibility of such expenditure in income tax assessment is to be judged in the context of section 37(1) of the Act. To be an allowable expenditure under section 37(1), the money paid out must be (a) paid out wholly and exclusively for the purpose of the business or profession and further (b) must not be (i). capital expenditure (ii) personal expense, or (in) an allowance of the character descr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve leave to submit additional grounds of appeal, if any, at or before the time of hearing and / or after, modify, reframe any grounds of appeal at or before the time of hearing. 6. At the outset, Ld. AR appearing on behalf of the assessee submitted before us that the membership is very much relevant for the purpose carrying on the assessee s business and further he brought to our notice the turnover achieved by the assessee during the assessment year 2015-16 2016-17 and the turnover of the assessee increased substantially after taking the membership. In this regard, he relied on the following decisions which are in favour of the assessee:- i) CIT vrs. Groz Beckert Asia Ltd [2013] 351 ITR 196 (P H) ii) Otis Elevator Co. (India) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AINED FOR RUNNING BUSINESS WITH A VIEW TO PRODUCE PROFIT-REVENUE EXPENDITURE-'INCOME-TAX ACT, 1961 If an item of expenditure is to be considered capital in nature, the expenditure should bring into existence an asset or an advantage for the enduring benefit of a trade. Membership fee paid to a club does not bring into existence an asset or an advantage for the enduring benefit of the business. It is an expenditure incurred for the period of membership and is not long lasting. By subscribing to the membership of a club, no capital asset is created or comes into existence. By such membership, a privilege to use facilities of a club alone, are conferred on the assessee and that too for a limited period. Such expenses are for running t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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