TaxTMI 
TaxTMI 
1993 (4) TMI 97
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.... sum of Rs. 78,435 from out of the total sum of Rs. 97,790 representing the disallowance made by the Assessing Officer in respect of the club bills of its executives. According to the Departmental Representative, the club bills cannot be considered as an expenditure laid out wholly and exclusively for the purpose of business as the assessee-company could not achieve any benefit by making such an expenditure. The club bills expenditure was not, therefore, to be allowed in computing the taxable profits of the assessee-company. The assessee-company has not established that there was a contract with the executives to pay their club bills in addition to the remuneration. 4. The assessee's counsel, on the other hand, relied upon the order of the Appellate Commissioner and submitted that the tea estates are situated in remote areas of Assam and it is essential for the executives posted in these tea estates to have social interaction for which the clubs provided an excellent common meeting place where executives could also have exchange of technical information relating to their works with the executives of other companies. Elaborating further Shri Ballav, assessee's counsel, submitted th....
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....ee-company were members of various clubs for having exchange of technical information relating to their work with the executives of other companies is too vague and general to be accepted for directing allowance of club bills of those executives. There might have been social interaction between the executives of the assessee-company with the executives of other companies, but to say or hold that such social interaction has resulted in growth of assessee's business is too far-fetched. The argument advanced on behalf of the assessee that the tea gardens being in very remote areas, it was very essential for the executives of the assessee-company to have social interaction and the club is one such place clearly goes to support the case of the Revenue rather than of the assessee that the club membership is not for business purposes but for social interaction and for other allied purposes and for availing facilities and amenities which are available in any club. 6. With utmost respect to our learned brothers, we cannot apply the findings given in order dated 13-2-1992 by 'E' Bench of this Tribunal in the case of A.P.E. Bellis India Ltd. [IT Appeal Nos. 527 to 531 (Cal.) of 1989] on whic....
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....h the return of income. When this is the requirement the Appellate Commissioner cannot extend the period by directing the Assessing Officer to receive the certificates from the Tea Board belatedly. 10. The assessee's counsel, on the other hand, submitted that the Appellate Commissioner did not go wrong in giving such a direction because the provisions of rule 8A(d) are directory in nature and not mandatory. The purpose of furnishing certificates from the Tea Board was to assist and enable the Assessing Officer to complete-the assessment in accordance with law. Moreover, the certificates from the Tea Board were received by the assessee-company after the filing of the return and, therefore, it was highly impossible for the assessee to comply with the provisions of rule 8A(d). To support the submissions reliance is placed by the assessee's counsel on the decision of the Kerala High Court in the case of CIT v. Malayalam Plantations Ltd. [1976] 103 ITR 835 and order dated 8-6-1992 of 'D' Bench of this Tribunal in the case of Berger Paints India Ltd. [IT Appeal No. 430 (Cal.) of 1992] and drew our attention to paragraph 22 of the said order. 11. We have given anxious consideration to t....
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.... particularly so when the production of the certificate along with the return of the income is not a matter entirely within the volition of the assessee. Even when he applies for the certificate in time, so long as there is no statutory duty cast upon the Tea Board to furnish it within any particular period of time, it may be that the certificate is not issued in time for production alongwith the return, which has to be filed within the given time. When the certificate, though filed later, is available to the Income-tax Officer for the purpose of determining the development allowance, the object of section 33A of the Act would be defeated by the construction that the provision in rule 8A requiring the certificate to be filed along with the return is a mandatory provision, non-compliance of which will disentitle the assessee to claim development allowance under section 33A of the Act. Therefore, though filing of the certificate is mandatory, the failure to file it along with the return will not result in forfeiture of the claim to development allowance." The 'D' Bench of this Tribunal also had an occasion to consider the effect of non-filing of audit report along with the return of....