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Director's club expenditure disallowed

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Querist : Anonymous

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..

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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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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