HEMANT GUPTA, J.

1. A Division Bench of this Court vide its order dated 31.10.2012 referred the following Question No.5.1 to the Larger Bench in view of the doubt expressed about the correctness of the view of a Division Bench of this Court in ITA No.448 of 2007 titled “Commissioner of Income Tax – I, Ludhiana Vs. M/s Majestic Auto Limited, Ludhiana” decided on 11.09.2008:

“5.1 Whether on the facts and in the circumstances of the case, the ITAT was right in law in not sustaining the addition of Rs.6,16,945/- on account of corporate membership fee paid to Golf Club as a capital expenditure?”

2. The said question of law arises out of the fact that the assessee obtained corporate membership of Golf Club, Chandigarh on payment of Rs.6 lacs. Rs.16,945/- was paid towards services and facilities used during the relevant assessment year. The Assessing Officer declined such expenses for the ITA No.366 of 2008 reason that the same are personal expenses of the Managing Director and other employees and, thus, added back to the income of the assessee. In appeal before the Commissioner of Income Tax (Appeals), the said disallowance was set aside holding that club membership is in the natu