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Amount forfeited in relation to immovable property

07 December 2017

an individual purchased a property and paid down payment. later on surrender the title and the advance payment forfeited. what will be the treatment of amount forfeited ?

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14 Replies

Sarath Rajendran (Nil) (2791 Points)
Replied 07 December 2017

it can ce adjusted with the cost of orginal property

Neha Mittal (240 Points)
Replied 07 December 2017

I am asking from the point of view of Ind whose amount get forfieted

Divakar (Student CA Final ) (11857 Points)
Replied 07 December 2017

No treatment for buyer... No capital loss or revenue loss is allowed under it act... It doesn't amount to relinquishment of right hence no capital loss

Neha Mittal (240 Points)
Replied 07 December 2017

okie @ divakar..
so how it will be treated while preparing books of accounts

Neha Mittal (240 Points)
Replied 07 December 2017

I think may be it is dead loss
correct me if I'm wrong @ divakar

Divakar (Student CA Final ) (11857 Points)
Replied 07 December 2017

Advance paid for commercial buildings and later it is forfeited it is not allowed as revenue loss

Divakar (Student CA Final ) (11857 Points)
Replied 07 December 2017

Hmmm... Disallow in profit and loss account

Pushpraj (student) (157 Points)
Replied 07 December 2017

I am not sure Bt It will consider as like penalty for individual for breach of contract. And we don't get any benefits for penalties.

Divakar (Student CA Final ) (11857 Points)
Replied 07 December 2017

here find treatment in the hands of buyer

Attached File : 1440160 20171207161419 screenshot 20171207 130632.pdf downloaded: 103 times

Neha Mittal (240 Points)
Replied 07 December 2017

I m glad @ divakar u find but I already know this 😊

further my question is if it is neither revenue loss nor capital loss then what would be the exact treatment of it.?