2016 (6) TMI 791

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....28.12.2006. 2. The only issue to be decided in this appeal is as to whether the Ld. CIT(A) is justified in upholding the disallowance of club expenses in the sum of Rs. 8,45,854/- in the facts and circumstances of the case. 3. Brief facts of the case are that during the course of assessment proceedings the assessee was asked to furnish various details of payments to club aggregating to Rs. 13,50,635/-. The said details were furnished to the Ld. AO and he after perusing the details enquired as to why such expenditure should not be disallowed. The assessee filed a written submission in this regard. However, while passing the order, the Ld. AO listed out certain expenses aggregating to Rs. 8,45,854/- and observed the same as personal expendi....

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....nd the statutory auditor had categorically mentioned that there is no personal expenditure debited in the books of accounts. Further payments were made to clubs having Gym and other sports facilities, where the executive directors could spend some time with the clients who are sports savvy. In the case of Otis Elevator Co.(India) Limited vs. CIT (195 ITR 682) the Hon'ble Bombay High Court held that "membership to clubs would provide offices and executives better contract and association with persons in good position and would result publicity. Payment of club fees was with a view to enable assessee to improve its business relations and prospects and hence an allowable business expenditure". It may be noted that this tribunal had allowed....

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....kata and had sought to disallow club expenses incurred in other clubs outside Kolkata. It cannot be doubted that assessee is an internationally reputed consultancy company having clients and business across the globe and in that process, key employees and directors had to travel to various destinations in furtherance of their business. We find that the issue is covered by the various decisions of High courts and by this tribunal in assessee's own case for AY 2002-03 in ITA No. 578/Kol/2006 dated 22.01.2010. The issue is also covered by the decision of the Hon'ble Apex Court in the case of CIT Vs. United Glass Mfg. Co. Ltd. reported in 2012-TIOL-102-SC-IT dated 12.09.2012 wherein it was held as below: "(ii) Whether club membership fee for ....