Case Law Details
New Globe Logistik Pvt Ltd Vs ITO (ITAT Mumbai)
The ITAT Mumbai held that the membership fees paid by New Globe Logistik Pvt Ltd to the Cricket Club of India for Shri. Anand Didwania, a director and later partner of the company, is allowable as a business expenditure. It was determined that the membership would bring benefits to the business of the company since Shri. Anand Didwania was a key person. Referring to the Supreme Court decision in the case of United Glass MFG Co. Ltd., the ITAT directed the Assessing Officer to delete the addition of Rs. 22,60,000/-.
Facts- The main grievance of the assessee is against the action of the Ld. CIT(A) confirming the action of the Ld. CIT(A) disallowing an amount of Rs.22,60,000/- being club membership fees paid to Cricket Club of India as non-genuine and for non-business related expense.
Conclusion- Held that membership was for Shri. Anand Didwania, who was a director & later partner of LLP and so, is a key person of assessee company/LLP. So entrance fees paid by the assessee on behalf of Shri Anand Didwania to the tune of Rs. 22,60,000/- for becoming member of the Cricket Club of India would inure benefits for the business of the assessee/LLP. And therefore, in the light of the Hon’ble Supreme Court decision in the case of United Glass MFG Co. Ltd. (supra) it is held to be an allowable deduction in the facts and circumstances of this case. Therefore, AO is directed to delete addition of Rs.22,60,000/-.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
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