2017 (9) TMI 2064

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..... In this appeal, Revenue has raised the following Grounds of appeal:- 1. "On the facts and in the circumstances of the case and in law, the Ld.CIT(A} erred in holding that the receipt on account of advance sale of room nights is not a revenue receipt, without appreciating the fact that the principle business of assessee is to provide accommodation and other facilities to tourist members and assessee is claiming all the expenses relatable to these receipts in its Profit & Loss account." 2. "On the facts and in the circumstances of the case and in law, the Ld.CIT (A) erred in holding that the provisions made by the assessee on the surrender value of holiday membership and claimed as deduction on payable basis are dependent ....

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....e, an individual became a member after making advance payments for utilization of room nights in future. If a member exercises his rights, he is entitled to avail the room nights as per the scheme. The member is also entitled to refund at the end of the respective scheme, the surrender value of the room nights. The assessee treated the advance received against sale of room nights as a liability and the same was disclosed in the balance sheet. The assessee treated the difference between the amount paid by the member and the surrender value as an expense spread over the tenure of the scheme and pro-rata amount was claimed as deduction. At the stage of the assessment, the Assessing Officer referred to the stand of the assessing authorities in ....

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....nitiation of proceedings under section 263 of the Act by the Commissioner. The Tribunal vide its order dated 16/03/2011(supra) dealt with the merits of the stand of the Commissioner, which is in consonance with what the Assessing Officer done in the impugned order and the Tribunal disagreed with the stand of the Revenue. Thereafter, the Hon'ble Bombay High Court in its order dated 09/05/2014(supra) upheld the proposition that having regard to the terms and conditions of the holiday scheme, no income accrues to the assessee at the time of receipt of the advances. The Hon'ble Bombay High Court took note of the factual finding arrived by the Tribunal that the scheme obligated the assessee to refund not only the advance payment, but als....

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....6,537/- on account of commission on payment basis. The Assessing Officer allowed the claim to the extent of Rs. 121,01,57,197/- culling out the aforesaid amount being pro-rata commission attributable to the instant period. The assessee raised the issue before the CIT (A) and the CIT (A) in para-5 of her order has allowed the claim of the assessee to the extent of Rs. 217,08,46,537/- on payment basis. Against such a decision of the CIT(A), Revenue is in further appeal before us. 7. In this context, the Ld. Representative for the assessee quite fairly conceded that having regard to the precedents and consistency in past as well as subsequent year assessment, the claim of the assessee on account of commission expenditure is to be ....