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of <h1>Tribunal upholds CIT(A)'s decisions, overturns bad debt claim disallowance, and allows club expenses for employee director.</h1> <h3>Assistant Commissioner of Income Tax Circle-1, Meerut Versus M/s. Accord Communication</h3> The Tribunal upheld the Ld. CIT(A)'s decisions on all grounds, dismissing the revenue's appeal. The disallowance of the bad debt claim was overturned, ... - Issues involved: Appeal against Ld. CIT(A) order for asstt. year 2006-07, Disallowance of bad debt claim, Disallowance of telephone expenses, Disallowance of club expenses.Bad Debt Claim Disallowance: The AO disallowed a sum of Rs. 11,52,901/- claimed as bad debt by the assessee, stating that the assessee failed to prove that these debts had actually become bad. On appeal, Ld. CIT(A) deleted the disallowance, citing the change in provisions u/s 36(i)(vii) post 1.4.89. The Ld. CIT(A) referred to various case laws including CIT Vs. Autometers Ltd. and Suresh Gaggal vs. ITO to support the decision. The Tribunal upheld the Ld. CIT(A)'s decision, stating that after 1.4.89, writing off the debt as irrecoverable is sufficient, and there is no need for demonstrative proof that the debts have actually become bad.Telephone Expenses Disallowance: The AO disallowed Rs. 50,000/- out of the total telephone expenses of Rs. 20,15,082/-, suspecting personal use of the facility. Ld. CIT(A) overturned this disallowance, relying on the judgment of Hon'ble Gujarat High Court in Sayaji Iron & Engg. Co. vs. CIT. The Tribunal agreed with Ld. CIT(A), stating that as the assessee is a company, no disallowance for personal use can be made.Club Expenses Disallowance: A sum of Rs. 3,897/- paid to Wheeler's club for an employee director was disallowed by the AO, claiming it as personal expenditure. Ld. CIT(A) reversed this disallowance, considering the nature of payment. The Tribunal upheld Ld. CIT(A)'s decision, citing the judgment in CIT Vs. Nestle India, where it was held that payment made as club membership fees is allowable business expenditure.Conclusion: The Tribunal dismissed the revenue's appeal, upholding Ld. CIT(A)'s decisions on all grounds, regarding the bad debt claim, telephone expenses, and club expenses.
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