Section 45 of Income Tax Act, 1961— capital gain— This appeal by Revenue has been directed against the Order of CIT, challenging the deletion of addition of Rs. 2,76,17,625/- made by A.O. on account of capital gain.

Assessee submitted that s 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 wherein it was held that  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 addition.

Held that—  we find that the facts of the case are similar as have been considered by the ITAT in the case of co-owner Shri Ashwani Khurana (supra).[THE DCIT, CC-08 VERSUS SHRI IQBAL CHAND KHURANA THROUGH LEGAL HEIR MS. ANU KHURANA] [2019] 16 ITCD Online (2) [ITAT DELHI]