Tribunal allows appeal on membership & event expenses, disallows disallowance under Section 14A.

The tribunal partly allowed the appeal of the assessee in ITA No.554/Del/2013 regarding disallowance of membership expenses paid to health clubs and disallowance of payment to event management services without TDS deduction. However, the tribunal fully allowed the appeal in ITA No.5298/Del/2013 concerning disallowance under Section 14A of the IT Act r/w Rule 8D. The judgments were pronounced on March 13, 2015.

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Issues Involved:
1. Disallowance of membership expenses paid to health clubs
2. Disallowance of payment to event management services without TDS deduction
3. Disallowance under section 14A of the IT Act r/w Rule 8D

Issue 1: Disallowance of Membership Expenses to Health Clubs:
The assessee, a Doctor, challenged the disallowance of membership expenses of Rs. 1,25,618 paid to health clubs, claiming it was related to the profession. However, both the Assessing Officer and CIT (A) deemed it as personal expenditure. The assessee argued that the membership was for monitoring heart functions of individuals undergoing cardio exercises. The tribunal found no evidence supporting this claim, dismissing it as personal benefit unrelated to the profession.

Issue 2: Disallowance of Payment to Event Management Services:
The assessee contested the disallowance of Rs. 1,68,000 paid to event management services without TDS deduction. While citing a Special Bench decision, the tribunal noted that the assessee had agreed to offer this amount for taxation voluntarily. As the assessee's submission limited further inquiry by the Assessing Officer, the tribunal rejected the appeal, stating the Special Bench decision was not applicable to the case.

Issue 3: Disallowance under Section 14A of the IT Act r/w Rule 8D:
The issue involved confirming the disallowance of Rs. 3,54,086 under section 14A of the IT Act r/w Rule 8D. The assessee argued that there was no direct nexus between the exempted income and claimed expenditure, relying on a Mumbai Bench decision. The tribunal observed that the assessee did not debit expenditure related to exempted income in the Income & Expenditure account, and the revenue failed to pinpoint any specific instance. Consequently, the tribunal allowed this ground of the assessee's appeal.

In conclusion, the tribunal partly allowed the appeal of the assessee in ITA No.554/Del/2013 and fully allowed the appeal in ITA No.5298/Del/2013. The judgments were pronounced on March 13, 2015.

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