2018 (12) TMI 1256

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....oreign exchange transaction should be assessed under the head capital gain or is exempt under Article-14(6) of India-Spain Double Taxation Avoidance Agreement (DTAA). 3. Brief facts are the assessee company, a tax resident of Spain, is licensed to purchase and sell securities in India as a Foreign Institutional Investor (FII). The assessee is also registered with the Securities and Exchange Board of India (SEBI). For the impugned assessment year the assessee filed its return of income on 20th November 2012, declaring total income of Rs. 77,91,989. During the assessment proceedings, the Assessing Officer while verifying the return of income having found that the assessee has treated the income / loss arising out of foreign exchange transact....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....me derived from sale of share is held to be taxable under section 14(4) of India-Spain tax treaty, the loss arising out of sale of shares by the assessee should be allowed and benefit of carry forward of loss to subsequent assessment year should also be made available to the assessee as per the domestic law. The Assessing Officer after considering the submissions of the assessee did not find merit in them. He held that the capital gain on sale of shares of companies engaged in real estate development activities is taxable in India under Article-14(4) of India-Spain tax treaty. At the same time, though, the Assessing Officer agreed that in the impugned assessment year the assessee suffered short term capital loss in respect of sale of shares....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....e-14(4) of the India-Spain tax treaty, therefore, capital gain / loss is taxable in India. He tried to distinguish the decision of the Tribunal in assessee's own case for preceding assessment year by submitting that the Tribunal has decided the issue keeping in view the Article-14(5) of the India-Spain tax treaty. In rejoinder, the learned Authorised Representative submitted, reference to Article-14(5) of the India-Spain DTAA in the order of the Tribunal is a typographical error which has been wrongly mentioned in place of Article-14(4). To demonstrate such fact, the learned Authorised Representative drew our attention to the assessment order and first appeal order passed for assessment year 2009-10. 6. Having considered rival submissions ....