2010 (9) TMI 1198

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....first ground of appeal, the assessee is aggrieved of the CIT(A) confirming the disallowance of Rs. 67,86,866 under section 40(a)(ia) of the Income Tax Act, 1961. 4. The issue in appeal lies in a narrow compass of material facts. There is no dispute that the assessee debited certain labour charges for sub contract work, in the relevant previous year except in the month of March  in respect of which matter has already been set aside by the CIT(A) for verification whether TDS payments have been made within due date, to the contractors. The taxes have not been deducted at source in respect of these payments. It is for this reason that disallowance has been made by the Assessing Officer under section 40(a)(ia) in respect of these amounts....

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....es under section 28(i) itself and without recourse to the provisions of Section 30 to 38, has not been examined by any of the authorities below and this plea is being raised for the first time. We, therefore, deem it fit and proper to remit the matter to the file of the CIT(A) for adjudication, on merits, on this plea. The matter stands remitted to the file of the CI(A) for this limited purpose. 7. Ground No. 1 is thus allowed for statistical purposes in the terms indicated above. 8. In ground no. 2, the assessee has raised grievance against disallowance of Rs. 12,00,000 on account of claim of deduction for club expense. 9. The assessee has made a payment of Rs. 10,75,000 for club membership fees in a club at Aurangabad and Rs. 1,2....

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....y from assessee's normal place of work. No doubt merely because club is not functional cannot be a ground enough for making the disallowance, as the authorities below have proceeded to hold, because it is the objective of the expensive, rather than end result obtained from the expenditure, which is material for deciding whether or not the expenses are incurred for the purposes of business. However, as no material has been filed before us either to demonstrate the business expediency of this expenditure, it is only fit and proper to remit the matter to the file of the CIT(A) for fresh adjudication on the question of admissibility of deduction in the light of business expediency of expenditure and also after determining whether the amount in ....