Transfer pricing comparables and operating income principles applied to software development services, with exclusions, inclusions, and tax credit ver...
Transfer pricing on performance guarantees and overdue receivables deleted where warranty obligations were embedded and working capital adjustment alr...
Under the mercantile system, a continuing obligation to provide promised facilities and amenities over a long-term timeshare membership period gave rise to an accrued, estimable liability, so proportionate revenue recognition was permissible. The Court held that the concept of deferred income is not alien to the Income-tax Act and applied the matching principle to the assessee's advance membership collections. Annual maintenance or utility charges collected separately were not equivalent to the contractual facilities promised under the membership arrangement. The Tribunal erred in taxing the entire membership receipt in the first year, and the substantial questions of law were answered in favour of the assessee.
Under the mercantile system, a continuing obligation to provide promised facilities and amenities over a long-term timeshare membership period gave rise to an accrued, estimable liability, so proportionate revenue recognition was permissible. The Court held that the concept of deferred income is not alien to the Income-tax Act and applied the matching principle to the assessee's advance membership collections. Annual maintenance or utility charges collected separately were not equivalent to the contractual facilities promised under the membership arrangement. The Tribunal erred in taxing the entire membership receipt in the first year, and the substantial questions of law were answered in favour of the assessee.
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