Case Law Details
M/S ICS Systems Private Limited Vs CIT (Delhi High Court)
Conclusion: Forfeiture of advance/deposit suffered by the assessee-company towards proposed purchase of plot, unilaterally deducted by HSIDC was a capital loss not a revenue loss as loss incurred was in the transaction relating to and for acquisition of a land/plot which was a capital asset.
Held: The issue arose for consideration was loss of money of the assessee caused by forfeiture of advance/deposit towards proposed purchase of plot, unilaterally deducted by HSIDC was a capital loss or a revenue . AO held that amount deposited with HSIDC was for acquiring a capital asset, and hence the amount deducted by HSIDC on surrender of the industrial plot would be a capital loss and not revenue expenditure. It was held loss incurred was in the transaction relating to and for acquisition of a capital asset. For some reason, the attempt made by assessee to acquire land/plot as a capital asset did not fructify. Hence, assessee had asked for refund of the amount, which was paid for acquisition of the capital asset. Forfeiture or deduction made by HSIDC while refunding the amount would be a capital loss and not a revenue expenditure.
FULL TEXT OF THE HIGH COURT ORDER / JUDGMENT
M/s ICS Systems Private Limited has filed the present appeal under Section 260A of the Income Tax Act, 1961 (Act, for short), which relates to Assessment Year 2001-02 and arises from the order dated 30th March, 2007 passed by the Income Tax Appellate Tribunal (Tribunal, for short).
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