Income tax on forfeiture of advance money

Yes, taxable.                  

ITO may apply the provision in the act...

Provisions of Sec. 56(2)(ix) [applicable if advance money received and retained on or after 1.04.2014] Income from other sources. 56.(2) In particular, and without prejudice to the generality of the provisions of sub-section (1), the following incomes, shall be chargeable to income-tax under the head “Income from other sources”, namely :— ix) any sum of money received as an advance or otherwise in the course of negotiations for transfer of a capital asset, if,— (a) such sum is forfeited; and (b) the negotiations do not result in transfer of such capital asset;

Though assessee can take advantage of the asset being rural agricultural land.