2010 (12) TMI 1348

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....the provisions of section 143(3) of the Income-tax Act, 1961. The assessee has taken up two grounds, the sum and substance of which is that the ld. CIT(Appeals) erred in allowing the deduction of a sum of Rs. 2,24,500/-, being the advance paid to the Municipal Corporation of Faridabad by it. 2. The facts of the case are that the assessee company filed its return on 30.10.2007 declaring total income of Rs. 43,10,400/-. The return was processed u/s 143(1) of the Income-tax Act, 1961 on 21.11.2008. Thereafter, the case was taken up for scrutiny by issuing notice u/s 143(2) on 26.9.2008. The assessee is carrying on the business of purchase and sale and transportation of coal and allied material. It is also carrying on the business of develop....

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.... 124 ITR 1. The ld. CIT(Appeals) mentioned that the aforesaid advance was not shown by way of stock-in-trade in the profit and loss account or the balance-sheet. It was merely shown as advance in the balance-sheet. The expenditure was incurred in relation to acquisition of land. On non-payment of subsequent installments, the amount was forfeited and consequently the assessee wrote off the amount from the balance-sheet. In view thereof, he concurred with the AO that the loss was on capital account. 4. Before us, the only argument made by the ld. counsel is that the loss has been incurred in the course of carrying on the business of development of real estate. Therefore, the loss is deductible in computing the income. He, however, persiste....