TaxTMI 
TaxTMI 
2020 (11) TMI 737
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....services and facilities used for entertaining the customers and to promote the business interests of the company as per para 6.2 of his order. 2. That addition of Rs. 1,67,060/- as per para No. 1, has been made against the facts and circumstances of the case and submission filed by the assessee during the course of hearing has not been considered properly. 3. That the Appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off. 3. From the aforesaid ground it is gathered that only grievance of the assessee relates to the sustenance of disallowance of Rs. 1,67,060/- incurred by the assessee for club services and facility used to entertain the customers for promoting the business intere....
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....scription on account of club services & facilities used. These expenses are of personal nature and not allowable expenses under section 37(i) of the Income Tax Act, 1961. Actually Ld. AO has misconstrued the facts and considered that these expenses has been incurred for the personal use of director where as fact is that these expenses have been incurred for business promotion of the company and facilities have been used by the director as well as other employee of the company and which has been properly explained to AO and hence are allowable as business expenditure u/s 37(1) of the Income Tax Act, 1961. Even otherwise it is pertinent to mention here that appellant is a listed company and in case of companies there is no concept of personal....
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.... She also observed that the assessee had claimed that those expenses were incurred for business promotion of the assessee company which makes them allowable under section 37(1) of the Act, however, no detail of those expenses had been provided, therefore, the nature of the expenses could not been verified and that the auditor had clearly mentioned those expenses to be of a personal nature. She therefore sustained the disallowance made by the A.O. 8. Now the assessee is in appeal. 9. Ld. Counsel for the Assessee reiterated the submissions made before the authorities below and further submitted that in the earlier years similar disallowances were deleted by the Ld. CIT(A). The reference was made to page no. 52 of the assessee's compilation ....
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....mann.com 429 (SC) 10. In his rival submissions the Ld. DR strongly supported the orders of the authorities below and reiterated the observation made therein. 11. We have considered the submissions of both the parties and perused the material available on the record. In the present case it is noticed that the assessee had incurred club expenses of Rs. 1,67,060/- (copy is placed at page no. 19 of the assessee's paper book) as per following details: a) Club subscription fees paid to the Oberoi, New Delhi Rs. 1,43,125/- b) Club membership fees paid to Noida Golf Club Rs. 17,935/- c) Club membership fees paid to Panchkula Golf Club Rs. 6,000/- Total Rs. 1,67,060/- 11.1 It is also noticed that a similar disallowance was made....
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.... of business of the assessee in the instant case, the assessee was a company and it was found by the Appellate Tribunal that the expenditure by way of subscription to the clubs was incurred for the. purpose of promoting the business of the company and in view of the finding of the Tribunal, it must be held that the expenditure incurred was an allowable business expenditure. In the case of subscription to clubs, in so far as the assessee was concerned, the expenditure was incurred to promote and foster its business relationship. The object of the assessee was that its directors by remaining as members in some of the city clubs would give them certain social status, and it was obvious that by being members of the club, they would be able to....