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2019 (8) TMI 183

..... assessee is more than the cost / indexed cost of capital asset, the excess amount remains as capital receipt and not taxable anywhere under the provisions of the Income Tax Act - HELD THAT:- We find that the facts of the case are similar as have been considered by the ITAT in the case of co-owner SH. ASHWANI KHURANA [2019 (3) TMI 11 - ITAT DELHI] treating the earnest money received and forfeited by the assessee in respect of any negotiation for transfer of capital assets to be deducted from the cost of assets. Since in A.Y. 10-11 there was no provision under the Act for treating the forfeiture of earnest money received during the negotiation of a capital assets as income from other sources, the Ld. CIT(A) has rightly deleted the addition. L .....

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..... f the amount received by the assessee as security and advance of ₹ 10 Crores was subjudice on the date of filing the original return of income. As per order dated 10.04.2012 of Delhi High Court, assessee has retained ₹ 4,62,50,000/- out of ₹ 10 Crore which was received as earnest money and advance against this house property and paid back the balance of ₹ 5,37,50,000/- to the earlier party with whom the earlier negotiation could not be materialized. The assessee was allowed to retain ₹ 4,62,50,000/- vide order dated 10.04.2012 of Delhi High Court only during the course of assessment proceeding for the A.Y. 2010-2011. Since this amount was retained by the assessee and the property in question was sold to another .....

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..... tal receipt not taxable in view Judgment of the Supreme Court case Travancore Rubber & Tea Co. Ltd. Vs. CIT (supra). However, the A.O. did not accept the contention of assessee and directed to charge capital gain on the impugned amount and directed that forfeited amount against the property has to be taxed as capital gain. One half share of the assessee was added for the purpose of capital gains. 3. The assessee reiterated the submissions made before the Ld. CIT(A) and submitted that as the amount retained by the assessee is more than the cost / indexed cost of capital asset, the excess amount remains as capital receipt and not taxable anywhere under the provisions of the Income Tax Act. It was, therefore, submitted that same should not .....

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..... sets i.e. 2,76,17,652/- as capital receipts. 12. The Ld. CIT(A) has decided the issue by discussing section 51 of the Act and has also reached the conclusion that u/s 56(2) a new sub- section (IX) has been inserted with effect from 01.04.2015 to treat the forfeited sum as income from other sources, but it is not applicable to the year under assessment which is A.Y 2010-11. 13. A co-ordinate bench of Tribunal in case cited as Randhir Singh Kadan vs. Department of Income Tax decided the identical issue by treating the earnest money received and forfeited by the assessee in respect of any negotiation for transfer of capital assets to be deducted from the cost of assets. Since in A.Y. 10-11 there was no provision under the Act for treating the .....

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