The Tax Publishers2020 TaxPub(DT) 4939 (Chd-Trib) : (2020) 083 ITR (Trib) 0426

INCOME TAX ACT, 1961

Section 37(1)

Assessee had incurred expenses on account of club membership fees for employees and to entertain customers and, therefore, expenses were allowable under section 37(1), though there might be a personal benefit enjoyed by director by way of various types of amenities afforded at club.

Business expenditure - Club expenses - Club membership fees for employees -

Assessee-company claimed deduction of expenses debited under the head 'Club Services'. AO treated expenses as personal in natue and thus disallowed deduction. Held: Assessee had incurred expenses on account of club membership fees for employees and to entertain customers. No doubt, there might be a personal benefit enjoyed by director by way of various types of amenities afforded at club, but personal benefit that went to director was incidental to membership of club. Therefore, expenses were allowable under section 37(1).

Followed:CIT v. United Glass Mfg Co. Ltd. (2012) 28 Taxmann.com 429 (SC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. :



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