TMI Blog2023 (4) TMI 567X X X X Extracts X X X X X X X X Extracts X X X X ..... d not be materialized due to non performance of contract by the buyer. Therefore, it cannot be said that the amount was received by the assessee without any consideration. Delhi High Court in the case of CIT vs Meera Goyal[ 2013 (2) TMI 74 - DELHI HIGH COURT] have observed that earnest money of 18 Cr forfeited by the assessee as provided in the agreement to sell received from the purchaser, Shinestar Buildcon Pvt. Ltd. who failed to pay the 'balance consideration by 30.03.2007, is a capital receipt not liable to tax. Provisions of section 51 would come into play in these circumstances as it specifically covers this type of transaction, once the transaction had been held to be genuine, there is no question of the transaction being without any consideration so as to invoke provisions of section 56(2)(vi) of the Act. The judgement of the Jurisdictional High Court is squarely applicable to the present case. Thus, we do not find any error/ infirmity in the approach of the ld CIT(A) in deleting the addition made by the A.O. and we find no merit in the Ground No.1 of the Revenue. Accordingly, ground No. 1 is dismissed. Assessee has not proved the genuineness and creditworth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee was amounting to Rs.1,08,86,303/- and the assessee had forfeited an amount of Rs.6 Crores which is way more than the total book value of the asset under consideration and hence claiming depreciation on the asset is illogical. 3. Brief facts of the case are that, the assessee had entered into agreement to sale with VA Realcom Pvt. Ltd. (Buyer) for the Property No. D-22/5 Okhla Industrial Area-II on 07/12/2013. For total sale consideration of 25 crore wherein the assessee received advance sale consideration of Rs. 6 crore by way of bank demand draft. Since, the buyer failed to pay the balance sale consideration of Rs. 19 crore even after issuing legal notice, the advance money of 6 crore was forfeited by the assessee. The A.O. brought to assess the amount of Rs. 4,91,13,697/- (6,00,00,000/- (-) 1,08,86,303/-) as income from other sources invoking of Section 56 (2) (vii) of the Act. The A.O. was of the opinion that the excess receipt of Rs. 4,91,13,697/- over and above Rs. 1,08,86,303/- cannot be treated as capital receipt. He was of the opinion that Section 51 of the Income Tax Act provides for taxation of advance money forfeited to the extent of cost of acquisiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount in complying with the conditions of the agreement, an amount of Rs. 6 crores paid as advance sale consideration was forfeited by the assessee. As per the opinion of the AO section 51 applies only to the amount received by the assessee towards advance money/ part payment to the extent of cost of acquisition/ WDV of the asset and not the amount over and above thereof. Therefore, only the amount of Rs. 1,08,86,303/- out of amount of Rs. 6 crores was reduced it from cost of acquisition/ WDV of the asset and treated the balance amount as income from other sources u/s 56(2)(vii) of the Act. The ld CIT(A) while deleting the addition relied on the ratio laid down in the case of CIT Vs. Meera Goyal (2014) 360 ITR 346 (Del) thereby deleted the addition made by the AO. 11. In our opinion, amount of 6 crores received by the assessee will not fall within the ambit of section 56(2) of the Act which read as under:- 56(2) in particular and without prejudice to the generality of the provisions of sub-section(1), the following income shall be chargeable to income tax under the head income from other sources namely - vii. Where an Individual or a Hindu Undivided Family receives ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the approach of the ld CIT(A) in deleting the addition made by the A.O. and we find no merit in the Ground No.1 of the Revenue. Accordingly, ground No. 1 is dismissed. 17. The department in ground No. 2 claimed that the assessee has not proved the genuineness and creditworthiness of the buyer ie: VA Realcom. It is found from the assessment order that at no pint of time the AO had doubted the genuinity of the transaction and no deficiency had been pointed out in the agreement to sell. Admittedly the amount has been received by the assessee as sale consideration by way of demand draft issued by the bank. Even during the appellate proceedings the ld CIT(A) has specifically made observation regarding genuineness of the transaction which read as under:- it is observed from available records including the impugned order that the relevant Agreement to Sell and receipt of the advance of 6 Cr by the appellant during the relevant PY from the buyer of its property has not been in doubt. The advance has come through banking channels. Further in view of the buyer's failure to honour the Agreement to Sell, the advance of 6 Cr was forfeited by the appellant. 18. In the absence o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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