The assessee entered into an agreement to sell certain property and received certain amount as earnest money. Subsequently, the earnest money was forfeited by the assessee and the amount was claimed as capital receipt. The Tribunal held that the amount received cannot assessed under section 56(2)(vi) of the Act. High Court affirmed the order of the Tribunal. Appeal of revenue dismissed. (AY. 2007-08)
CIT v. Meera Goyal (2025) 476 ITR 152 (SC) Editorial : Order of High Court affirmed, CIT v. Meera Goyal (2013] 214 Taxman 298 / (2014) 360 ITR 346/267 CTR 265 (Delhi)(HC)
S. 4 : Charge of income-tax-Forfeiture of earnest money arising out of agreement to sale a property is not liable to tax–Income from other sources-Capital receipt-Advance received under agreement to sell-Forfeited-Receipt would go to reduce cost of acquisition of asset-Cannot be assessed as income from other sources-Appeal of revenue dismissed. [S. 51, 56(2)(vi), Art. 136]
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