Docker Compose failed to build - Filesharing has been cancelled

I am using Docker in Windows 10 and had the same problem.
The solution suggested by Oleg Nenashev and Rejoanul Alam helped me.
Adding the project dir where the Dockerfile lives or C:/ to docker shared folders solves the problem.

Step 6 from Getting started states:

Shared folders, volumes, and bind mounts
If your project is outside of the Users directory (cd ~), then you need to share the drive or location of the Dockerfile and volume you are using.
If you get runtime errors indicating an application file is not found, a volume mount is denied, or a service cannot start, try enabling file or drive sharing.
Volume mounting requires shared drives for projects that live outside of C:\Users (Windows) or /Users (Mac), and is required for any project on Docker Desktop for Windows that uses Linux containers.
For more information, see File sharing on Docker for Mac, and the general examples on how to Manage data in containers.
If you are using Oracle VirtualBox on an older Windows OS, you might encounter an issue with shared folders as described in this VB trouble ticket. Newer Windows systems meet the requirements for Docker Desktop for Windows and do not need VirtualBox.

After changing "File Sharing" to C Drive its start working in my windows machine. I am using docker desktop 2.3.0.3

You need to update File Sharing configuration in your Docker for Windows app (there is a new security hardening in 2.2.0.0 which has agressive defaults). Add all folders you need and then restart Docker for Windows.