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TMI Blog2020 (3) TMI 1069X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Ld. AO towards subscription and membership fees paid to clubs, while computing income under the head profits and gains of business or profession. Accordingly, we are inclined to uphold the findings of the Ld.CIT(A) and dismiss, appeal filed by the assessee. - ITA No.453/Mum/2019 (Assessment Year: 2014-15) - - - Dated:- 5-2-2020 - SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER Assessee by: Shri R.N. Vasani And Shri V.H. Vasani, AR s Revenue by: Shri Ashish Kumar, DR ORDER PER G.MANJUNATHA (A.M): This appeal filed by the assessee is directed against, the order of the Ld. Commissioner of Income Tax (Appeals) 48, Mumbai, dated 31/12/2018 and it pertains to Assessment Year 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loss at ₹ 14,09,440/-. The case was selected for scrutiny under CASS for the reasons negative income from partnership firm resulting in reduction of the taxable income and accordingly, notices u/s 143(2) and 142(1) of the I.T.Act, 1961, were issued. In response to notices, the Authorized Representative of the assesse appeared from time to time and filed various details, as called for. During the course of assessment proceedings, the ld. AO noted that the assessee is a partner in a partnership firm M/s Okay Industries and the only income declared under the head income from business is interest from partnership firm current account and capital account. The Ld. AO, further noted that against income from partnership firm, the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of revenue expenditure, which is deductible u/s 37(1) of the I.T.Act, 1961. The Ld.CIT(A) after considering relevant submissions of the assessee and also, taken note of the fact that the assessee has not carried out any business activity in her individual capacity, came to the conclusion that expenditure incurred for club membership and subscription fees paid to National Sports Club of India is not in the name of the firm and also, the amount has not been paid from firm account. Therefore, it cannot be said that expenditure is incurred wholly and exclusively for the purpose of business, which can be allowed as deduction u/s 37(1) of the I.T.Act, 1961. Accordingly, confirmed additions made by the Ld. AO towards disallowances of payment made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17/Mum./2016 Mum-Trib] 6. The Ld. DR, on the other hand, strongly supporting order of the Ld. AO, as well as the Ld.CIT(A) submitted that the Ld. AO was right in disallowed subscription and membership fee paid to National Sports Club of India, because the assessee has not carried out any business activity in her individual capacity in order to get the benefit of deductions towards said expenditure, while computing income under the head income from business or profession. He, further submitted that although, various courts have held that club membership fees paid for the benefit of employees is in the nature of revenue expenditure, which is incurred wholly and exclusively for the purpose of business of the assessee. But, fact remains th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... carried out any business activity in her individual capacity, nor incurred said expenditure wholly and exclusively for the purpose of business of the assessee, because when there is no business activity the argument that club membership fees and subscription would benefit the business of the assessee is very farfetched. Admittedly, the assessee has derived interest income from partnership firm against which she had claimed various deductions, including subscription and membership fees paid to various clubs. Further, the membership fees also not in the name of the firm or in the name of all the partners. The payments for membership fees has not been made from partnership firm account, but, rather it has been paid from assessee own funds. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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