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TMI Blog2016 (10) TMI 534X X X X Extracts X X X X X X X X Extracts X X X X ..... Decided against assessee - I.TA No. 2027 & 2028/Mum/2014 - - - Dated:- 24-8-2016 - SHRI D.KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI C.N. PRASAD, JUDICIAL MEMBER For The Assessee : Shri Rajiv Khandelwal Shri Neelkanth Khandelwal For The Revenue : Shri Airiju Jaikaran ORDER PER C.N. PRASAD, JM: These two appeals are filed by the assessee against the orders of the Ld. CIT(A)-23, Mumbai dated 16.12.2013 pertaining to assessment years 2005-06 2006-07 arising out of the assessment orders passed u/s. 143(3) of the Act. 2. The only issue in these appeals are that the Ld. CIT(A) erred in upholding the action of the Assessing Officer in disallowing Club Membership Fees. 3. Brief facts are that the Assessing Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmits that the payment made by the assessee was towards club membership and club membership fee is allowable expenditure. He submits that the club membership fee was incurred for the purpose of the expediency of the business therefore is an allowable expenditure. 6. The Ld. Departmental Representative vehemently supports the orders of the authorities below and he submits that the assessee has not proved that these expenses/Club membership fee has been incurred for the expediency of the business and the expenses incurred towards club membership is also not paid to the club but was given to one Shri Ajay Purushty and it is only for personal purpose and no part of it can be allowed as business expenditure. 7. We have heard the rival subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee and decide the matter by way of a speaking order in accordance with the law . 7.1. In the set aside proceedings, the Ld. CIT(A) has examined the issue elaborately with reference to the averments of the Assessing Officer and the submissions of the assessee and concluded that the expenses incurred by the assessee are not wholly and exclusively for the purpose of business and the expenses are not allowable expenses observing as under: I have considered the facts of the case and the submissions made by the assessee. From the submissions made by the assessee, it is abundantly clear that the payment of ₹ 12,00,000/- has not been expended wholly and exclusively for the purposes of the business of the assessee. Out of the ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee. The assessee has himself submitted that Shri Purushty had allotted contracts to the assessee and had also released the payments to him from time to time. It is, therefore, clear that the assessee has made the payments of ₹ 12,00,000/ - in question out of gratitude towards the assessee and not in the course of and in connection with the earning of his business income. The assessee appears to have appreciated the help given by Shri Purushty and in appreciation of such help, the assessee has paid him the money in question in the garb of membership fees of the club. Even assuming that Shri Purushty was in a position to give certain benefits in the nature of awarding contracts to the assessee, the payments made by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has not been expended wholly and exclusively for the purposes of the business of the assessee. The payments made are in the nature of personal payments. Even if it is accepted that the payments have been made for the purpose of obtaining membership of the club, the assessee has not been able to establish the business expediency of acquiring the membership of a club which is hundreds of kilometers away from his place of business. Further, the assessee has also not furnished any evidence to show that the club has become operational and was capable of being used for business purposes. Even if it is assumed that the payments have been made for the purpose of obtaining membership of the club, the expenditure would be in the nature of personal ex ..... X X X X Extracts X X X X X X X X Extracts X X X X
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