Payment Made For Acquiring Membership In A Social Club Can’t Be Allowed As Business Expenditure: ITAT

The Mumbai Bench of the Income Tax Appellate Tribunal has observed that payments made for acquiring membership in a social club could not be allowed as business expenditure when there was no evidence to prove that membership in the social club was acquired for entertaining customers by the assessee.The bench of Vikas Awasthy and Om Prakash Kant. The Mumbai Bench of the Income Tax Appellate Tribunal has observed that payments made for acquiring membership in a social club could not be allowed as business expenditure when there was no evidence to prove that membership in the social club was acquired for entertaining customers by the assessee. However, the one-time entrance fee for acquiring club membership by individual members cannot be treated as a business expenditure. The ITAT noted that membership fees to clubs could be business expenditures in the case of "corporate membership", but not in the case of individual club membership.