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2006 (1) TMI 104 - HC - Income TaxShort-term capital loss – cancellation of contract - assessee cancelled his order for supply of machinery – out of earnest money of Rs. 1,16,000, suppliers decided to return Rs. 36,000 after deducting Rs. 80,000 as cancellation charges - Tribunal came to the conclusion that the concluded contract between the assessee and the suppliers through the exchange of letters was not a capital asset in the hands of the assessee, and there was no transfer whatsoever within the meaning of section 2(14) - it was the assessee who was not willing to perform its part of the contract. Therefore, to claim that the assessee was in possession of a right which could be termed to be a capital asset within the meaning of section 2(14), cannot be accepted and the Tribunal was justified in holding that the assessee was not in possession of any capital asset. - Tribunal was right in law in holding that the assessee was not entitled to deduction of Rs. 80,000 as short-term capital loss
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