One of my client has a property having cost Rs. 25 Lakh. Market value of said property is Rs. 10 crore. My client has received token money of Rs. 1 crore towards agreement for sale of the said property. Now as the rates of property crashed the buyer cancelled the agreement and as per agreement my client forfeited the amount of 1 crore. Now my question is that what is the taxability of this 1 crore. As this is not sale then according to me the cost of the property will be reduced by this amount. but what would be the position of the excess amount of Rs. 75 Lakh ( 1 crore - 25 lakh). Pls advice on this matter.
CAclubindia
