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TMI Blog2019 (8) TMI 183X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. Ld. CIT(A) following his findings in the case of co-owner Shri Ashwani Khurana (supra), deleted the addition. The Order of the Ld. CIT(A) in the case of co-owner have been confirmed by the Tribunal. - Decided in favour of assessee - ITA.No.2798/Del./2015 - - - Dated:- 1-8-2019 - Shri Bhavnesh Saini, Judicial Member And Shri R.K. Panda, Accountant Member For the Assessee : Shri Ashok Khurana, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich 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 buyer during the previous year relevant to A.Y. 2010-2011 and the gain on sale was taxable during the previous year relevant to Assessment Year 2010- 2011, the assessee revised his computation of income to give effect of this money retained by him in the previous negot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 be taxed under capital gains. The Ld. CIT(A) found that the issue is same as have been considered in the case of Shri Ashwani Khurana, New Delhi for the A.Y. 2010- 2011 under appeal and the Ld. CIT(A) following the reasons for decision in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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