Forfeiture of Earnest Money Deposit is allowable Expenditure

Vardhaman Axles & Wheels Pvt. Ltd. Vs DCIT (ITAT Kolkata) The only effective issue raised in this issue is disallowance of expenditure of Rs. 5 lakh claimed towards forfeiture of earnest money deposit by Orissa Minerals & Development Co. Ltd. (in short “OMDC”). The lower authorities have denied the said deduction considering it as not for business purposes. We, after considering the submissions of both the parties and also the copy of intimation letter dated 09.06.2010 issued by OMDC placed at page 11 of the paperbook, notice that the assessee gave a deposit to OMDC with reference ...