Gains from Forward Contract Cancellation Deemed Capital Asset Due to Foreign Exchange Fluctuation on Plant Acquisition Loan.

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Full Text of the Document

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....Addition made on account of gains from cancellation of forward contract - Allegation that, the so-called asset could not be created not any foreign exchange loan was taken by the assessee for such assets - The intended loan have been raised for the purpose of acquisition of plant & machinery and gain so earned on fluctuation of foreign exchange rate was on capital account. Thus, the gain so earned would partake the character of capital asset. - AT....