Madras HC Allows Time-Share Membership Fees to Be Spread Over Contract Period

CIT-LTU Vs Mahindra Holidays and Resorts (India) Ltd. (Madras High Court) Conclusion: Time-share membership fees received upfront were not fully taxable under the Income Tax Act in the same year as it was intrinsically linked with continuing contractual obligations to provide accommodation and related facilities throughout the membership period and it can be spread over the contract period because services are given for many years. Held: Assessee-company was engaged in the business of time-share hospitality services, collected membership fees from customers for granting holiday accommodation r...