Entire Time-Share Membership Fee Cannot Be Taxed in Year of Receipt: Madras HC

Sterling Holiday Resorts (India) Ltd. Vs ACIT (Madras High Court) The Madras High Court allowed the appeals filed by Sterling Holiday Resorts (India) Ltd. relating to assessment years 1997-98 to 2001-02 concerning taxation of deferred income arising from time-share membership fees. The assessee, engaged in the time-share business, collected membership fees for 99-year agreements and treated 45% of the consideration as current income while deferring 55% as “advance subscription towards customer facilities” to meet future obligations relating to amenities and services promised to members. Th...