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TMI Blog2024 (9) TMI 1107X X X X Extracts X X X X X X X X Extracts X X X X ..... ss hour the connection with customer and the meeting with the parties are conducted in the club premises. So, this membership is very much connected for the furtherance of the business. We respectfully relied on the order of in case of Bayer Vapi (P.) Ltd. [ 2019 (5) TMI 1208 - GUJARAT HIGH COURT] and in the case of Swiss Re Services India (P.) Ltd. [ 2023 (10) TMI 979 - BOMBAY HIGH COURT] - In our considered view, expense claimed in the head of revenue expenditure u/s 37(1) is related with the business of the assessee. Assessee appeal allowed. - Shri Prashant Maharishi, AM And Shri Anikesh Banerjee, JM For the Assessee : Shri Vishal D. Shah, AR For the Revenue : Shri Manoj Kumar Sinha, DR ORDER PER ANIKESH BANERJEE, J.M: 01. Instant appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21(a) furnish the details of amounts debited to the profit and loss account, being in the nature of capital, personal, advertisement expenditure etc. In the membership and subscription column the amount is mentioned as ₹ 25,49,449/-. In the processing of the return under Section 143(1) of the Act, the learned Assessing Officer has treated the amount as capital expenditure and rejected the assessee s claim under Section 37(1) of the Act. Being aggrieved on the assessment order, the assessee filed an appeal before the learned CIT (A). The learned CIT (A) upheld the assessment order. Being aggrieved on the appellate order, the assessee filed an appeal before us. 04. The learned Authorized Representative argued and filed a written submiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon the decision of Delhi High Court in case of CIT v Samtel Color Ltd. [2009] 180 Tasman 82.120101 326 11R 425, where it is held that the expenditure incurred by the assessee by way of admission fee paid to obtain corporate membership of club, entitled it to sponsor specified number of its employees to enjoy the benefits of club for which separate payments had to be made and such membership allowed employees to interact with its customers, it could be said that the expenditure was incurred wholly and exclusively for purpose of business and was to be allowed as business expenditure. The Tribunal also relied upon the decision in case of (77 v Groz Beckert Asia Ltd 2013 31 tasmann.com 155/214 Taxman 205 (Punj Har) wherein it is held that sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siness purpose basis adopted approach. This is more so in view of for eligibility of expenditure under section 37 the Tribunal's findings that it was the assessee which nominated the employee who would avail the benefit of the corporate membership given to the assessee. 5.2 The other hurdle for qualification of the expenditure under section 37 of the Act is that expenditure incurred should not be on capital account. The Assessing Officer came to the conclusion that the expenditure was of a capital nature based on a fallacious reasoning that the expenditure was of an enduring nature and hence on a capital account. It is well settled that an expenditure which gives enduring benefit is by itself not conclusive as regards the nature of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue or capital expenditure. The Supreme Court came to the conclusion that since the fee was paid to the Registrar of Companies for increase in the capital base of the assessee it was in the nature of capital expenditure. According to us the ratio of the afore-mentioned Supreme Court judgment is not applicable to the expenses incurred on an admission fee for corporate membership. We respectfully disagree with the ratio of the judgment of the Kerala High Court. In turn, we respectfully follow the ratio of the judgment of the Division Bench of this Court in CII v. Nestle India Ltd 2008 296 ITR 682 that of the Bombay High Court in the case of Otis Elevator Co (India) Ltd. v. CIT (1992) 195 ITR 682. 15. In our view also the expenditure incurr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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