Dismissing the appeal the Court held that,  the forfeiture of the amount of Rs.3,93,327 was a capital expenditure or loss as it was a loss incurred not for the purpose of, or as an integral part of the profit-earning process, but for acquisition of an asset or a right of permanent character. The loss incurred was in a transaction which related to and for acquisition of a capital asset. For some reason the attempt of the assessee to acquire the plot as a capital asset did not fructify. Hence, the assessee had asked for refund of the deposit paid for acquisition of the capital asset. Forfeiture or deduction while refunding the amount would be a capital loss and not a revenue expenditure. (AY. 2001-02)