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Property seller cancels contract - capital gain
A property seller cancels a contract of sale and has to pay additional money to the buyer for cancellation. Will this payment be included in the cost of acquisition/ improvement for Capital Gains purpose?
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If the property seller was assessed under business income from sale of properties then he can claim entire compensation as revenue expenditure. However, if such property was a capital asset then this compensation shall be treated as cost of improvement, being a capital expenditure.
The case is that of the house being a capital asset. Can you share some legal precedents in support of your view? Thanks!
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