TaxTMI 
TaxTMI 
2010 (3) TMI 880
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....f Mauritius. The assessee is registered with SEBI as a sub-account of JP Morgan Fleming Asset Management, which is registered with SEBI as a Foreign Institutional Investor. The return was filed declaring total income at Rs. Nil. During the course of assessment proceeding it was inter alia observed by the Assessing Officer from the return of income, "schedule-E, statement of losses & allowances brought forward from preceding assessment years and carried forward", that the assessee has claimed carry forward of capital losses pertaining to assessment year 2002-03 of Rs. 87,06,49,335. According to the Assessing Officer since the capital gains are not taxable in India as per the provisions of Article 13 DTTA between India and Mauritius, it neces....
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....xable only in Mauritius because the appellant is a tax resident of Mauritius," and, accordingly, held that the appellant is not entitled to carry forward short-term capital loss or long-term capital loss arising out of the transfer of securities in India and dismissed the appeal. 3. Being aggrieved by the order of the ld. CIT(A) the assessee is in appeal before us taking following sole ground of appeal : "That the ld. CIT(A) erred in denying the appellant the right to carry forward the capital losses brought forward from the earlier assessment years, to subsequent years, under the provisions of the Act." 4. At the time of hearing the ld. Sr. Counsel for the assessee submits that the assessee in the return of income in "schedule-E, ....
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....axable only in Mauritius because the appellant is a tax resident of Mauritius and since the loss is not assessable in India the assessee is not entitled to claim the carry forward the same loss for the subsequent years. He, further submits that since the assessee has not claimed that such loss to be set off for the year under consideration therefore, the Assessing Officer and ld. CIT(A) have erred in not allowing carry forward of such set-off of loss for the subsequent years. Referring to the decision of Hon'ble Supreme Court in CIT v. Manmohan Das [1966] 59 ITR 699, the ld. Sr. Counsel for the assessee submits that it is settled law that the loss in any year may be carried forward to the following year and set off against the profits and g....
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....ding assessment years to subsequent years. It has to be adjusted in the year under consideration and hence, the Assessing Officer was justified in disallowing the claim of the assessee. He further submits that the assessment for the assessment year 2002-03 was completed under section 143(1) of the Act, therefore, in the year under consideration the Assessing Officer while considering the impugned claim of the assessee has passed a speaking order under section 143(3) that the claim of carry forward of brought forward losses is not allowable. He therefore, submits that the order passed by the Assessing Officer and confirmed by the ld. CIT(A) be upheld. 6. We have carefully considered the submissions of the rival parties and perused the mat....
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....spute is as to whether the set off can be considered or deemed to have been considered in the year under consideration or it may be allowed to be carried forward to the subsequent assessment years. 7. In Manmohan Das's case (supra) the Hon'ble Supreme Court has held (page 700 head-notes) as under : "(iv)That the assessee was following a vocation and his remuneration had to be computed under section 10 and the loss or profits suffered in that vocation in any year could be carried forward to the next year to be set off against the profits of the succeeding year. Whether the loss in any year may be carried forward to the following year and set off against the profits and gains of the subsequent year under section 24(2) has to be deter....
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....d the appeals affirming the decision of the High Court that if the quantification of loss is properly and duly notified by following the prescribed procedure, such quantification may be impressed with the principle of finality, but the principle of finality did not apply to the determination of the source of income and to a decision whether the loss can or cannot be allowed to be carried forward by reason of the determination of the source." 9. The CBDT has also clarified the stand taken by the revenue vide Circular No. 22 of 1944, dated 29-7-1944, para-2 (page 1408 of Direct Tax Circular Income-tax by Chaturvedi & Pithisaria's Income-tax Law (5th Edition) (10th Vol.) as under : "Non-resident's Indian loss to be carried forward and no....