TaxTMI 
TaxTMI 
2025 (6) TMI 650
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....y way of this consolidated order. With the consent of the parties, the appeal in ITA No. 2072/Mum./2025 is considered as a lead case, and the decision rendered therein shall apply mutatis mutandis to other appeals before us. ITA No. 2072/Mum./2025 IShare ESG Aware MSCI EM ETF - A.Y. 2022-23 3. In this appeal, the assessee has raised the following grounds: - "On the facts and circumstances of the case, the Appellant craves leave to prefer an appeal against the order under section 143(3) read with section 144C(13) of the Act dated 15 January 2025, issued by the Deputy Commissioner of Income Tax (International Taxation)-2(2)(2), Mumbai ('the learned Ld.AO') in pursuance of the directions under section 144C(5) of the Act issued by the Hon'ble DRP-I, Mumbai dated 5 December 2024 on the following grounds, each of which is without prejudice to and independent of the others On the facts and in the circumstances of the case and in law, the learned AO/ Hon'ble DRP: Merits of the case: Rejecting the hierarchy of set-off of Short-Term Capital losses adopted by the Appellant 1. erred in rejecting the hierarchy of set-off of short-term capital losses adopted by the Appellant and....
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....he assessee is a company incorporated in Mauritius, and is registered with the Securities and Exchange Board of India as a Foreign Portfolio Investor. For the year under consideration, the assessee filed its return of income on 07/11/2022, declaring a total income of Rs. 513,82,25,780. The return filed by the assessee was selected for scrutiny, and statutory notices under section 143(2) and section 142(1) of the Act were issued and served on the assessee. During the assessment proceedings, it was observed that the assessee computed the net short-term capital gains amounting to Rs. 26,50,59,538, which is chargeable to tax as follows: - Particulars Amounts (in INR) Amount of Short-Term Capital Gains taxed at 15% under section 111A of the Act (A) 34,40,28,248 Amount of Short-Term Capital Loss taxed at 15% under section 111A of the Act (B) 9,99,56,708 Amount of Short-Term Capital Gains taxed at 30% under section 115AD of the Act(C) 2,09,87,996 Amount of Short-Term Capital Gains taxed at 30% under section 115AD of the Act (D) NIL Total short-term capital gains chargeable to tax [E=A-(B-C)] 26,50,59,536 6. Thus, it was observed that the assessee set off the short-term ca....
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....t this issue is pending consideration before the Hon'ble Bombay High Court in the case of DIT vs. M/s. DWS India Equity Fund, in ITA No.1414 of 2012, and there is no judicial finality on this issue. 10. In conformity with the directions issued by the learned DRP, the AO passed the impugned final assessment order under section 143(3) r.w. section 144C(13) of the Act computing the net short-term capital gains amounting to Rs. 24,40,71,541 taxable at 15% under section 111A of the Act and the net short-term capital gains amounting to Rs. 2,09,87,996 taxable at 30% under section 115AD of the Act. Being aggrieved, the assessee is in appeal before us. 11. During the hearing, the learned Authorized Representative ("learned AR") submitted that this issue is covered in favour of the assessee by various decisions of the Co-ordinate Bench of the Tribunal. 12. On the other hand, the learned Departmental Representative ("learned DR") vehemently relied upon the order passed by the lower authorities. 13. We have considered the submissions of both sides and perused the material available on record. The sole issue which arises for our consideration in the present appeal is whether the short-term....
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....against the net short-term capital gain on which no securities transaction taxes paid Short-term capital loss should be first set of against short-term capital gain on which securities transaction tax is paid 2. Balance short-term capital loss shall be first set of against short-term capital gain on which securities transaction taxes paid If short-term capital loss still remains it is to be carried forward and not that of against short-term capital gain on which no securities transaction tax is paid and consequently short-term capital gain on which no securities transaction tax is paid is to be taxed at the rate of 30% 3. If short-term capital gain on which securities transaction tax is paid still remains, such gains are set of against available brought forward short-term capital loss One short-term capital gain on which no securities transaction tax is paid is proposed to be taxed at the rate of 30% the brought forward short-term capital loss allowed to be carried forward without utilizing such brought forward short-term capital loss was set off 018. Provisions of section 70 of the income tax act provides for the set off of losses from one source against income from a....
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....the short-term capital gains earned by the assessee. Such claim is in accordance with the provisions of section 70 (2) of the act. 022. We find that several judicial precedents relied upon by the assessee also supports the case of the assessee. The honourable Calcutta High Court in Rungamatee Trexim ITA number 812 of 2008 dated 19 December 2008 held that there is no provision nor the act compels the assessee to lstset of short-term capital gain which STT against short-term capital loss with STT and then allows set of against short-term capital gain without STT. Therefore, without multiplying judicial precedents, following the decision of the honourable Calcutta High Court, and several other judicial precedents of the coordinate benches relied upon before us, we allow ground number 4 - 10 of the appeal of the assessee and direct the assessing officer to allow set-off of short-term capital loss suffered by the assessee against short-term capital gain of Rs. 791,221/-." 16. We find that similar findings have been rendered by the Co-ordinate Benches of the Tribunal in favour of the taxpayer in the following decisions: - 1. Emerging Markets Index Non-Lendable Fund vs. DCIT, Mumbai,....
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....ions under section 144C(5) of the Act issued by the Hon'ble DRP-1, Mumbai dated 2 December 2024 on the following grounds, each of which is without prejudice to and independent of the others: On the facts and in the circumstances of the case and in law, the learned AO/Hon'ble DRP: General 1. Erred in assessing the total income of the Appellant at Rs. 2.563,142,330 instead of the returned income of Rs. 2,452,056,490. Merits of the case: Rejecting the hierarchy of set-off of Short-Term Capital losses adopted by the Appellant 2. erred in rejecting the hierarchy of set-off of short-term capital losses adopted by the Appellant and thereby, taxing the gross short-term capital gains in respect of transactions on the sale of shares not chargeable to Security Transaction Tax (STT); 3. failed to appreciate that income under the head 'Capital Gains' is determined as per sections 45 to 55A of the Act whilst sections 111A and 115AD only provide for determination of tax in certain cases and therefore, gains arising on transactions subjected to STT and those not subjected to STT are no different and satisfy the 'similar computation' condition specified in sect....
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....ection 234B of the Act - Rs. 139,391,602 14. erred in levying interest under Section 234B of the Act amounting to Rs. 139,391,602. Levy of interest under section 234C of the Act - Rs. 146,705 15. erred in levying interest under Section 234C of the Act amounting to Rs. 146,705. Levy of interest under section 234D of the Act-Rs.10,020 16. erred in levying interest under Section 234D of the Act amounting to Rs. 10,020. Initiation of penal proceedings under section 270A of the Act 17. erred in initiating penalty under section 274 r.w.s. 270A of the Act alleging underreporting of income by the Appellant. The Appellant craves leave to add, alter, vary, omit, substitute or amend any or all of the above grounds of appeal, at any time before or at, the time of the appeal, so as to enable the Hon'ble Income-tax Appellate Tribunal to decide this appeal according to law." 23. Ground no.1 is general in nature. Therefore, the same needs no specific adjudication. 24. The issue arising in grounds nos.2 to 6, raised in assessee's appeal, pertains to the manner of set off of short-term capital loss, which was incurred by the assessee from the transaction in shares on which STT ....
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....i dated 2 December 2024 on the following grounds, each of which is without prejudice to and independent of the others: On the facts and in the circumstances of the case and in law, the learned AO/Hon'ble DIP: General 1. Erred in assessing the total income of the Appellant at Rs. 1,536,306,420 instead of the returned income of Rs. 1,472,932,450. Merits of the case: Rejecting the hierarchy of set-off of Short-Term Capital losses adopted by the Appellant 2. erred in rejecting the hierarchy of set-off of short-term capital losses adopted by the Appellant and thereby, taxing the gross short-term capital gains in respect of transactions on the sale of shares not chargeable to STT; 3. failed to appreciate that income under the head 'Capital Gains' is determined as per sections 45 to 55A of the Act whilst sections 111A and 115AD only provide for determination of tax in certain cases and therefore, gains arising on transactions subjected to STT and those not subjected to STT are no different and satisfy the 'similar computation' condition specified in section 70(2) of the Act; 4. failed to appreciate that since section 70 of the Act does not provide any h....
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....credit of tax deducted at source amounting to INR 246,176 Levy of Interest under section 234B of the Act-Rs.121,939,776 15 erred in levying interest under Section 234B of the Act amounting to Rs. 121,939,776 Levy of interest under section 234C of the Act - Rs. 5,930 16 erred in levying interest under Section 234C of the Act amounting to Rs. 5,930 Levy of interest under section 234D of the Act - Rs. 11,518 17 erred in levying interest under Section 234D of the Act amounting to Rs. 11,518 Initiation of penal proceedings under section 270A of the Act 18 erred in initiating penalty under section 274 r.w.s. 270A of the Act alleging underreporting of Income by the Appellant The Appellant craves leave to add, alter, vary, omit, substitute or amend any or all of the above grounds of appeal, at any time before or at, the time of the appeal, so as to enable the Hon'ble Income-tax Appellate Tribunal to decide this appeal according to law." 31. Ground no.1 is general in nature. Therefore, the same needs no specific adjudication. 32. The issue arising in grounds nos.2 to 8, raised in assessee's appeal, pertains to the manner of set off of short-term capital loss, which w....