SHORT TERM LOSS

here mr.X will demand compensation from mr.A

suppose mr A has given him compensation of rs.50000

and mr.X had paid  rs.10000 as advance money

then there will b capital gain (s.t.c.g/l.t.c.g) of rs.40000 in hands of mr.X

To the extent of Advance money received will be reduced from the cost of acquisition for the seller.

Advance/compensation money will be adjusted from COA of that capital asset

Further, the party who have cancled the contract will not be entitle to calim any loss including capital loss.

The Advance Paid will be reduced from the cost of Acquisition.