Advance membership and room-night receipts not revenue expenditure where refund obligations exist; s.263 directions require appellate review

SC dismissed the Civil Appeals and SLPs, upholding the HC's factual finding that advance receipts under membership/room-night schemes do not constitute allowable revenue expenditure where the business is hotelier and the schemes obligate refunds including surrendered value. The Court held the Commissioner's sweeping directions under s.263 warranted appellate consideration and that the appeal to the Tribunal was competent and maintainable. Noting no claim was filed in the CIRP and the resolution plan has been approved and implemented, the appeals were dismissed following existing precedent.

---

---

It is recorded that for the assessment years in question the appellant-Department made "no claim" in the Corporate Insolvency Resolution Process (CIRP), the resolution plan for which was approved on 25.04.2024 and is under implementation. On that basis and "taking note of the above submission and following the judgment" in Ghanashyam Mishra and Sons Private Limited v. Edelweiss Asset Reconstruction Company Limited [(2021) 9 SCC 659], the Court ordered that the Civil Appeals and Special Leave Petitions be dismissed. The Court disposed of any pending applications. The decision rests on the absence of a claim in the CIRP and application of the cited precedent, resulting in dismissal of the departmental appeals challenging matters tied to the insolvency proceedings.

---