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Director's club expenditure disallowed

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Querist : Anonymous

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Querist : Anonymous (Querist)
03 January 2011 Dear All,

Acrually I have received A.O. 143(3) in which director's club expenditure ( subscription has been disallowed and added back). Now I want to go to CIT (A)...
Can anyone plz.. refer sum grounds and case laws to make my claim successful..
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Bhaskaran Chackrapani Warrier

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Bhaskaran Chackrapani Warrier (Expert)
03 January 2011
The following case law may be referred to:-

CIT v. Sundarm Indus­tries Ltd. [1999] 240 ITR 335 (Mad).

Crux of the decision is as under:-

Subscriptions paid by company to clubs for enrolling its direc­tors as members are deductible expenditure since the assessee company had not spent the money with the object of providing a personal relaxa­tion to the director, but it was incurred to promote its busi­ness, since in the commercial world the contact with the right person is vital for an efficient business organisation.
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