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| The Tax Publishers2020 TaxPub(DT) 4996 (Del-Trib) INCOME TAX ACT, 1961
Section 37(1)
Where forfeited amount received from the same person had already been taxed in earlier assessment year, when the same was returned during the current year on booking of the flat, could not be held to be capital expenditure as said expenditure springs from the business of assessee of the real estate.
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Capital or revenue expenditure - Payment of amount on account of flat forfeiture - Nature of -
Assessee paid an amount on account of flat forfeiture. AO held that this amount was not in the nature of revenue expenses as these were in nature of advance made therefore, could not be allowed under section 37(1) and thus was held to be a capital expenditure. Held: The claim of the assessee on account of repayment of forfeited amount earlier received by the assessee, taxed duly in previous assessment year, subsequently, those persons received forfeited amount from assessee, booked the real estate during the year and therefore, forfeited amount was returned by the assessee was definitely an expenditure which springs from the business of the assessee of the real estate.Thus, above expenditure incurred wholly and exclusively for the purpose of booking of a real estate, cannot be held to be a capital expenditure.
REFERRED :
FAVOUR : In favour of assessee.
A.Y. : 2016-17
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