Dear friend,
As of now, the marriage proposal stands cancelled. The reason may be different according to the perceptual difference of the boy and yours. Whatever the type of marriage, unqualified and genuine love between the life partners is the undercurrent of the succesful married life. Of course, as rightly observed by Mr.Simhan, in an arranged marriage, knowing one another fully before the ceremony is a matter of chance only. Even in a love marriage also, courtship can be deceptive till the marriage gets solemnised leaving the ultimate blame later to either one's own choice. Therefore, in my opinion, mind-games like the one in your case should be avoided by the man and woman both before and after marriage.
Coming to your case, the incident preceding the cancellation of the proposal is indicative of the fact that you both are too much demanding and hence very fastidious in life. It is an admitted fact of life, Indian parents and brides are very concerned about the regular earnings of the groom next to caste and social status.
How did you believe that he would not be trust worthy when he himself admitted having shown an inflated earnings?
Divulging the same, since he also told you to keep it between yourselves, why can't it be a test for your reliability?
Your strong desire for retaliation shows certainly that you would have conveyed the same to your parents and the discreet inquiry, if any done by them could have come to his knowledge and he would have taken the decision to cancel the alliance.
Marriage, in India, is not a mere social contract but a sacrament too irrespective of religious differences.
Besides, a successful married life is a matter of mutual understanding and give and take which would culminate in a happy living together despite the individual differences. Inter dependence is the way of life. Therefore, a man and woman with incompatible mind sets can never make themselves an ideal husband and wife.
My humble suggestion, therefore, would be dropping all further retaliatory steps and go ahead. Any such action taken by you would be absolutely difficult to prove and even if it's successful, it would be a pyrrhic victory only serving no good for your future.