INCOME TAX ACT, 1961

Section 37(1)

Capital or revenue loss - Forfeiture of security deposit - Security deposit was given for hiring commercial premises to run busienss of assessee -

Assesse-company claimed loss on account of forfeiture of security deposit AO treated the same as capital loss. Held: As per copies of agreements submitted by assessee, security deposit was given for hiring commercial premises to run business of assessee and as assessee did not continue with rental property, security deposit given was forfeited accordingly, security deposit forfeited during the course of business activity was revenue loss allowable under section 37(1).

Relied:Thackers H.P. & Co. v. CIT (1982) 134 ITR 21 (MP) : 1982 TaxPub(DT) 638 (MP-HC) and Pyoginam v. Addl. CIT 130 TTJ (Trib).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2008-09

INCOME TAX ACT, 1961

Section 36(1)(iii)

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