1981 (11) TMI 67

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....bership fee paid by the assessee for becoming a member of the Western Sports Club. According to the counsel of the assessee the expenditure should be allowed as a revenue expenditure as the assessee being company could not derive any benefit of enduring nature. 2. On the other hand, the ld. D.R. contended that the payment of membership fee is certainly a benefit of enduring nature and should be allowed only as capital expenditure and not as revenue expenditure. 3. We heard the rival contentions. In Empire Jute Co. Ltd. vs. CIT (1980) 17 CTR (SC) 113 : (1980) 124 ITR 1 (SC) it is observed by their Lordships' that what is material to consider is the nature of the advantage in a commercial sense and it is only where the advantage is in t....

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.... 6. On the other hand, the contention of the ld. D. R. was that as the power house machinery is not eligible for the initial depreciation under the provisions of the IT Act, the CIT (Appeals) was justified in disallowing the same. It is not a part of the machinery which manufactures goods or articles. In fact s. 32A(2)(iii) clearly lays down that investment allowance can be admissible only to the machinery used for the production of any article or thing and not to all machineries as contended by the Company. Similarly s. 32(1)(iv) also use the similar words manufacture or production and hence initial depreciation is also not admissible. 7. We heard the rival contentions, In our view when the power house machinery is necessary for the pr....

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....s of the assessee to the other unit. The capital employed in the industrial undertaking is definitely reduced. The CIT (Appeals) was justified in confirming the disallowance to the extent of Rs. 8,18,413 which was advanced to the other unit from the capital computation u/s 80J. 10. We heard the rival contentions. When the amount of Rs. 8,18,413 has been given temporarily to the other unit of the assessee, we find no justification to disallow the claim of the assessee. In our view the balance of Rs. 8,18,413 kept with the other unit should be computed as capital employed for calculating the deduction u/s. 80J. 11. Last issue for our consideration is whether the CIT (Appeals) has erred in facts and in the circumstances of the case and i....