2020 (3) TMI 1069

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....CIT(A)-48 committed gross error of law and facts in confirming the disallowances made by the assessing officer-21(3)(1) of Rs. 22,50,009/- or the ground that the expenses incurred were not wholly and exclusively for the purpose of business. 2. She failed to appreciate the facts that the said expenses were revenue in nature, incidental and wholly & exclusively for the purpose of earning income, 3. She faired to appreciate the facts that club membership Fee being revenue in nature and rot capital or personal expense is allowable u/s 37[1) / 57 of the Income-tax Act, 1951 4. She erred in not accepting the facts that the corporate membership being costly it was taken by him in his individual name and claimed against h....

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....fees paid to National Sports Club of India (NSCI) of Rs. 22,47,200/-. Therefore, he called upon the assessee to explain as to why membership and subscription fees paid to NSCI of Rs. 22,47,200/- shall not be disallowed, while computing income from business and profession, because said expenditure is in the nature of personal expenditure, which cannot be allowed as deduction. In response, the assesee vide letter, dated 21/11/2016 submitted that expenditure incurred on Club membership and subscription fees is deductible under section 37 of the I.T.Act, 1961 against income assessable under the head income from business. The Ld. AO after considering relevant submissions of the assessee and also, taken note of provision of section 37 of the Act,....

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....) order, the assessee is in appeal before us. 5. The Ld. AR for the assessee submitted that the Ld.CIT(A) was erred in confirming additions made by the Ld. AO towards disallowances of Club membership and subscription fees, which was claimed as business expenditure against income from business being interest on capital and current account from partnership firm without appreciating the fact that Club membership fees and subscription fees is in the nature of revenue expenditure, which is incurred wholly and exclusively for the purpose of business of the assessee. The Ld. AR, further referring to various judicial precedents, including the decision of Hon'ble Supreme Court, in the case of CIT vs United Glass Manufacturing Company. Ltd. in Civ....

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....st business income being interest on capital and current account from partnership firm, without having any business activity carried in her individual capacity. Therefore, the Ld. AO, as well as the Ld.CIT(A) were right in disallowed said expenditure. 7. We have heard both the parties, perused the material available on record and gone through orders of the authorities below. The assessee has made payment of Rs. 22,50,009/- towards membership fees and subscription fees to Juhu Vile parle, Gymkhana and National Sports Club of India and claimed deductions towards said expenditure, while computing income under the head income from business and profession being interest on capital and current account from partnership firm M/s Okay Industries.....