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2019 (1) TMI 1273 - HC - Income TaxNature of loss - loss of money of the appellant caused by forfeiture of advance/deposit towards proposed purchase of plot - capital loss or Revenue loss - Held that:- Once and for all, fixed capital or an enduring benefit test should be applied to differentiate between purchase of capital asset and stock-in-trade, which demarcate the distinction between capital and revenue expenditure. In the said case, as capital asset was not capable of being exploited as a business asset, payment of compensation in respect thereof for not executing the agreement was considered as capital expenditure. We agree with the aforesaid reasoning. In the present case the loss incurred was in the transaction relating to and for acquisition of a capital asset. For some reason, the attempt made by the appellant-assessee to acquire land/plot as a capital asset did not fructify. Hence, the appellant-assessee had asked for refund of the amount, which was paid for acquisition of the capital asset. Forfeiture or deduction made by the HSIDC while refunding the amount would be a capital loss and not a revenue expenditure. - Decided against the assessee.
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