INCOME TAX ACT, 1961

Section 37(1)

Business expenditure - Allowability - Club membership fee and incidental expenses -

Assessee claimed Rs. 4,38,829 as admissible club expenses. The said sum comprises of membership fee of Rs. 2,75,014 and the amount spent towards other services at Rs. 1,63,815. AO disallowed the expenses of Rs. 1,63,815. On appeal, CIT(A) set aside the disallowance and the finding of the CIT was confirmed by the Tribunal through the order under appeal. Both the parties submit that the extent to which the assessee was entitled to claim as permissible deduction was no more res integra, by the decision of this court in ITA. No. 1347 of 2009, dated 13-3-2019. Both the counsel state that the assessee was entitled to claim deduction to the extent of subscription or membership fee if paid by the assessee but not incidental expenses incurred by the employees/member of the assessee.Held: The order of the CIT(A) and the Tribunal having regard to the extent of granting complete deduction to the amount spent towards club membership fee and incidental expenses was untenable. Hence order was therefore, liable to be set aside and accordingly set aside, and this issue was remitted to the AO for verification of the actual expenses incurred by the assessee and pass revised orders.

Followed:ITA No. 1347 of 2009, dated 13-3-2019.

REFERRED :

FAVOUR : In assessee's favour (partly)/Matter remanded.

A.Y. : 2002-03

INCOME TAX ACT, 1961

Section 115JB Section 36(1)(iii)

SUBSCRIBE FOR FULL CONTENT