Loss on account of forfeiture of advance paid to customer is allowable

Divyasree Holdings Pvt. Ltd Vs Principal Commissioner of Income Tax (ITAT Bangalore) As far as the addition of Rs.50 lakhs made by the CIT in the impugned order is concerned, the conclusion of the CIT is based on the reading of the different clauses of the MoU. We are of the view that the parties are at liberty to agree on terms even contrary to the MoU dated 1.5.2007. Shri. Rakesh Rastogi forfeited a sum in question and the same was accepted by the assessee. The fact that the assessee could have disputed and challenged the action of Shri. Rakesh Rastogi in forfeiting the sum of Rs.50 lakhs an...