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| The Tax Publishers2020 TaxPub(DT) 3406 (Mum-Trib) INCOME TAX ACT, 1961
Section 37(1)
Payment of club membership fees was for life membership, benefit of which was spread over the life of member and, therefore, expenditure was capital in nature.
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Capital or revenue expenditure - Club membership expenditure - Life membership fee -
Assessee-company claimed deduction of club membership expenditure. AO held that expenditure was capital/personal expenditure and did not fall under the ambit of revenue expenditure. Held: Payment of club membership fees was for life membership, benefit of which was spread over the life of member and, therefore, expenditure was capital in nature. Further, personal expenses for membership did not fall within the ambit of revenue expenditure.
Followed:Otis Elevator Co. Ltd. v. CIT (1992) 195 ITR 682 (Bom) : 1992 TaxPub(DT) 486 (Bom-HC) and CIT v. Johnson & Johnson Ltd. (2012) 80 Taxmann.com 337 (Bom) : 2017 TaxPub(DT) 1277 (Bom-HC).
REFERRED :
FAVOUR : Against the assessee.
A.Y. : 2002-03
INCOME TAX ACT, 1961
Section 40A(2)
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