1994 (1) TMI 19

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....1961 (hereinafter referred to as "the Act"), at the instance of the Revenue, the following question of law has been referred to this court for its opinion : " Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the sum of Rs. 21,000 being the deposit made by an intending buyer, forfeited and appropriated by the assessee, did not constitut....

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....ct would not apply, the Appellate Assistant Commissioner found that in the sale advertisement, there was a provision to the effect that the amount deposited will be forfeited, if the intending buyer did not complete the transaction and that the amount deposited and forfeited was not capital, but casual in nature and taxable under the head "Other sources". On further appeal by the assessee to the T....

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....yer did not complete the sale. Pursuant to this the amount deposited by an intending buyer came to be forfeited as he did not complete the sale. Though before the authorities below the question was whether this amount would constitute "income" or it was of not "a casual and recurring nature", etc., we are of the view that it is unnecessary to enter into a consideration of those aspects. Even as pe....

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....onnection to refer to the decision in CIT v. Balaji Chitra Mandir [1985] 154 ITR 777 (AP), where it had been pointed out that compensation paid for cancellation of a contract, not affecting the trading structure of the business or resulting in the deprivation of the source of income, leaving the person free to carry on his trade, is a revenue receipt and that where the cancellation of the agreemen....