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2009 (7) TMI 25 - HC - Income TaxWhen to compute - Sale of Land – Advance Money Receive – Transfer of Assets – Tribunal held that amount received as advance money towards sale price of land was not be considered as assessee’s income till the sale was complete and title passed to the buyers under registered sale deeds, though possession of land had been given - the moment an earnest money or deposit is received, certain legal incidents are attached to it. It is a security received for due performance of the contract. If the purchaser commits breach of the agreement, earnest money can be forfeited. Once earnest money or deposit is received, it is not a refundable amount. This is a great factor to be reckoned in determining whether the receipt of earnest money is a trading or revenue receipt or a capital receipt. – Held that Tribunal Order is not correct and answered in favor of revenue.
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