TMI Blog2020 (12) TMI 602X X X X Extracts X X X X X X X X Extracts X X X X ..... ny money or other money received in connection with negotiations of any capital asset and retained by the assessed shall be deducted from the cost for which the asset was acquired in computing the cost of acquisitions while determining the capital gains. Going through the provisions of Sections amended and pre-amended, we find that till the assessment year 2015- 16, the amount of forfeiture is not liable to be taxed but will go only in reducing the value of the asset while computing the taxability of the assessee under the head capital gains . There is no taxability of the forfeited amount in the current year. The revenue may monitor or keep track of determination of capital gains as and when the asset is finally sold. Not to leave the issue raised by the revenue of receipt of advance money from M/s Shine Star Built Co. Pvt. Ltd. of ₹ 18 crores during the assessment year 2007-08, we find that the Hon ble High Court [ 2013 (2) TMI 74 - DELHI HIGH COURT] deleted the addition made by the AO on similar grounds and held that the amount received should be treated in accordance with Section 51 of the Income Tax Act, thus, resting the arguments of the revenue. - ITA No. 823 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect an agreement for sale of property as assessee s income under the head Income from Other Source , 1.a) Whether the Ld. CIT(A) has erred in holding that the amount forfeited is in the nature of capital receipt in terms of Section 51 which is required to be adjusted against the cost of the property while computing capital gains on sale of the such property in future, not appreciating the fact that the said section is meant to apply to genuine transactions and therefore, where the act of forfeiture is being used as a device in view of similar forfeiture in respect of the same property in the past, the AO was justified in treating the amount forfeited as income of the assess u/s 56 of the Act. 1.b) Whether the Ld. CIT(A) has erred in relying upon the decision of the jurisdictional High Court in assessee s own case for A.Y. 2007-08, not appreciating the fact that the decision of Hon ble High Court in the said Assessment Year proceeded on entirely different premises, namely i) that the AO had failed to comply with the direction given by the Addl. Commissioner of Income Tax u/s. 144A of the Act, which were binding on him. ii) that the plea of applicabil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , earlier also there was a claim of forfeiture and as such the claim of forfeiture in respect of the very same property in the year under consideration is a willful attempt to avoid payment of tax on forfeited amount. However, in the absence of any adverse observation regarding genuineness of agreement to sale, the matter is required to be considered on legal principles. 6.8 The AO has not disputed the source and genuineness of receipt of earnest money as same was on the basis of execution of agreement to sell and once there is a legal transaction between the parties, there cannot be any ground or basis to presume that receipt of ₹ 12,50,00,000/- as in the nature of income from other sources. There is thus no primary basis for holding the receipt of ₹ 12,50,00,000/- as income from other sources. 6.9 However, regarding the fact, whether receipt of amount ₹ 12,50,00,000/- forfeited by the appellant could be considered as income and chargeable to tax in terms of provisions of sec. 51 of I.T. Act, 1961 which deal with the issue of receipt of any advance in respect of any capital asset. The scope of sec. 51 has been dealt with in appellant s own case for A. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licable for the assessed for the instant year. 8. The ld. DR on the other hand, argued that the assessee has been habitually receiving money and forfeiting it. He argued that on the earlier occasion, the assessee received ₹ 18 crores and subsequent he received ₹ 12.50 crores against the property of value of ₹ 30.16 lacs. Hence, the amount has been rightly held to be taxable by the ld. CIT(A). 9. Heard the arguments of both the parties and perused the material available on record. 10. We have gone through the provisions of the Act. The provisions of Section 51 are as under: 51. Where any capital asset was on any previous occasion the subject of negotiations for its transfer, any advance or other money received and retained by the assessee in respect of such negotiations shall be deducted from the cost for which the asset was acquired or the written down value or the fair market value, as the case may be, in computing the cost of acquisition: [Provided that where any sum of money, received as an advance or otherwise in the course of negotiations for transfer of a capital asset, has been included in the total income of the assessee for any previ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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