Input service credit on club membership charges denied for lack of nexus with business activity and no proof of business use.

Input service credit was denied on club membership charges because the appellants failed to show that the memberships were used for business meetings or had any nexus with the firm's business activity. It was also admitted that the firm itself was not a club member. In the absence of evidence linking the service availed to the business operations, the requirement of input service under Rule 2(l) was not met, and credit was therefore unavailable.

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Issues: Whether input service credit was admissible on club membership charges incurred by the directors for alleged business meetings.

Analysis: The appellants did not produce evidence to show that the club membership was used for business meetings or that the service had a nexus with the business activity of the appellant firm. It was also admitted that the firm itself was not a member of the club. In the absence of a demonstrated nexus between the service availed and the business activity, the requirement of input service under Rule 2(l) was not satisfied.

Conclusion: Input service credit on club membership charges was not available to the appellants.

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