Assessee was engaged in export of cotton and other agricultural products to various countries. It entered into contract proforma invoice with proposed purchasers of foreign country specifying therein terms of contract of goods, time period of supply and rate. It paid contract cancellation charges to various foreign parties for non-fulfilment of contractual terms and conditions resulting in settlement of contracts at price lower than pre-determined price. The AO  held that said contract cancellation charges as speculation loss and disallowed same.  CIT(A) held that contract cancellation charges were in nature of payment for failure to oblige contractual terms and conditions resulting in settlement of contracts at price of lower than pre-determined price and, thus, assessee had to make payment as per terms of contract, further, noted that cancellation of contract was in respect of supply of goods in which assessee was dealing and it was assessee who knew his business and knew when to enter into a contract and when to exit. Accordingly,  held that such cancellation of contracts by assessee was part and parcel of regular export business and, thus, directed to delete disallowance made by Assessing Officer. On appeal the Appellate Tribunal affirmed the order of the CIT(A). (AY. 2012-13)