Expenditure for acquisition of individual club membership is not allowable

Balrajsingh Jagjitsingh Kharbanda Vs ADIT (ITAT Mumbai)

ITAT Mumbai held that membership fee expenses have been incurred for acquisition of individual club membership is not allowable as expenditure in terms of provisions of section 37 of the Income Tax Act.

Facts- The assessee , an individual, filed return of income for the year under consideration which has been processed by the Centralized Processing Centre, Bangalore (CPC) u/s. 143(1) of the Income-tax Act, 1961. In order u/s 143(1) of the Act i.e. intimation order, CPC made upward adjustment of Rs.10,76,720/- to the returned income. The said amount was paid for the entry fee of the membership of Mumbai Cricket Association, Bandra, for the benefit of the employees and for entertaining the customers of its business.

CIT(A) dismissed the appeal. Being aggrieved, the present appeal is filed.

Conclusion- In the instant case membership fee expenses have been incurred for acquisition of membership for assessee individual and not for employees. The membership entry fee paid by the assessee is not for corporate membership.

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