Assessee had booked a plot for which an advance of Rs. 10,000/- was paid to the broker. because the land was not awarded N.A., the broker after 3 years returned the amount with a premium totalling to Rs. 5,00,000/-. whether the enhanced amount received be taxable under the head capital gain. More so, whether the said income is assessed under Income Tax. (being a capital receipt). Please support with relevant case laws or sections.
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Capital gain whether attracted
Replies (6)
I thinks it will taxable under ''Income from Other Sources".
Confirm d same from CCI experts.
The said income cannot be termed as capital receipt.
I too agree with above answers.this is not a case of relinquishment of rights and hence cant be termed as transfer as per section 2(47).The assessee himself hasnt relinquished any rights rather it will be termed as an advance to the broker and the premium received will be dealt under the head other sources considering section 56 (Subsection yaad ni he 
) .moreover the said person is a broker and has got no right to sell the property.So the concept of ownership also creeps in leaving no space for capital gain.as he cant sell what he hasnt
completely agreed with your answer saharsh.
THIS WILL NOT BE A CASE OF CAPITAL GAIN. REASON BEHIND IS THE MONEY IS NOT RECEIVED ON ACCOUNT OF ANY CAPITAL ASSET. AT THE TIME OF RECEIPT THERE WAS NOT ANY CAPITAL ASSET IN EXISTENCE.
IT IS A CASE OF INCOME FROM OTHER SOURCES.
Totally agreed with Mr. Mahesh Kumar Sharma....
Its a case of Income from other sources...
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