The  AO treated the actionable claim right as capital asset and taxed the same upon exercise of right in March 31, 2014, being the date when set-off was allowed by DoT. CIT(A) upheld the order of the AO.  On appeal the Tribunal held that, set off of non-refundable entry fee paid by group company UW to DoT in 2008, against the fresh spectrum fee payable by assessee towards allocation of telecom licenses cannot be regarded as ‘transfer’ under S. 2(47) of the Act. Further Tribunal rejected Revenue’s stand that consequent to the set off, capital asset acquired by assessee was extinguished and thus there was a ‘transfer’ under S. 2(47) of the Act of a short term capital asset (being held for a period less than 36 months). Tribunal held that ‘right’ which is not enforceable by law, cannot be regarded as a ‘capital asset’, thus holds that assessee had not acquired any capital asset from UW under the Actionable Claim agreement since UW did not hold such asset at any point of time. Tribunal ruled in favour of the assessee.  ( AY.2014-15)