TaxTMI 
TaxTMI 
2025 (6) TMI 1131
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....an Mauritius Co.) C/o Ernst & Young LLP Versus DCIT (International Taxation) - 4(2)(1), Mumbai Shri Vikram Singh Yadav, Accountant Member And Shri Sandeep Singh Karhail, Judicial Member For the Assessee : Shri Anish Thacker, Shri Pranay Gandhi For the Revenue : Shri Satya Pal Kumar, CIT-DR, Shri Krishna Kumar, Sr.DR ORDER PER BENCH The present appeals have been filed by separate assessee's against the separate final assessment orders passed under section 143(3) read with section 144C(13) of the Income Tax Act, 1961 ("the Act"), pursuant to the separate directions issued by the learned Dispute Resolution Panel, Mumbai ("learned DRP") under section 144C(5) of the Act, for the assessment year 2022-23. 2. Since the issues that arise for our consideration are similar in all the appeals, these appeals were heard together as a matter of convenience and are being decided by way of this consolidated order. Further, as the basic facts in all the appeals are the same, we have elaborately mentioned only the facts in the appeal being ITA No.2147/Mum/2025 for the sake of brevity. However, if any particular issue is arising in any other appeal for the first time, facts pertai....
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....of the Jurisdictional Tribunal; Arithmetical errors in the computation sheet 5. Without prejudice to the above, erred in computing the gross total income chargeable to tax at Rs. 2,783,322,958 in the computation sheet, as against Rs. 2,707,567,910 determined in the impugned order; 6. erred in computing the income under the head business and profession at Rs. 7,56,55,050 as against Nil determined in the impugned order and consequently, computing higher tax liability at the rate of 40%; Levy of total interest and fees payable - Rs. 2,147,997 7. erred in levying total interest and fees payable amounting to Rs. 2,147,997 whereas there is NIL interest as per computation sheet under section 234A, 234B,234C and 234D of the Act. Short grant of TDS credit - Rs. 236,926 8. erred in granting TDS credit to Rs. 236,926. Initiation of penal proceedings under section 270A of the Act 9. erred in initiating penalty under section 270A of the Act alleging misreporting of income by the Appellant." 2. The issue arising in grounds no.1 to 4, raised in assessee's appeal, pertains to the manner of set off of short-term cap....
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.... 5. The Assessing Officer ("AO"), vide draft assessment order dated 24/03/2024 passed under section 144C(1) of the Act, disagreed with the submissions of the assessee and held that computation of the net short-term capital gains by the assessee is not in order. The AO further held that the IT Rules have clearly defined separate columns for set-off and carry forward of gains of having differential tax rates. Accordingly, the short-term capital gain was computed by first setting off 15% loss against 15% gains, as follows: - Particulars Amount (INR) (Taxable @ 15%) Amount (INR) (Taxable @ 30%) Short-term capital gains 4,51,55,529 4,60,58,240 Short-term capital loss other than those covered under section 111A of the Act NIL Short-term capital loss covered under section 111A of the Act (1,55,58,719) Net Short-term capital gains 2,95,96,810 4,60,58,240 6. Accordingly, the AO computed the net short-term capital gains amounting to Rs. 2,95,96,810 taxable at 15% under section 111A of the Act and the net short-term capital gains amounting to Rs. 4,60,58,240 taxable at 30% under section 115AD of the Act. 7. The assessee filed....
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....ake any further classification between the transactions where STT was paid and the transactions where STT was not paid. The emphasis of the AO on the term "similar computation" also only refers to the computation as provided under sections 48 to 55 of the Act, and therefore, does not support the case of the Revenue. 13. We find that while deciding a similar issue, the Co-ordinate Bench of the Tribunal in iShares MSCI EM UCITS ETF USD ACC vs. DCIT, reported in [2024] 164 taxmann.com 56 (Mum.-Trib.), following the decision of the Hon'ble Calcutta High Court in CIT vs. Rungamatee Trexim (P.) Ltd. [IT Appeal number 812 of 2008, dated 19.12.2008], allowed the set off of short-term capital loss (on which STT was paid) against the short-term capital gains (on which STT was not paid). The relevant findings of the Co-ordinate Bench, in the aforesaid decision, are as follows: - "016. This Leaves us with the only grounds relating to computation of short-term capital gain and set off of short-term capitalloss. The only issue in this appeal is that assessee has earned short-term capital gain of 7 791,221/- which is chargeable to tax at the rate of 30%. Assessee claims that it has sh....
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....term capital gains computed in similar manner as provided under section 48 to section 55 of the act. It is clear that section 48 to section 55 does not provide for rate of tax on capital gain. It specifically lays down the computation mechanism of capital gain and certainly not tax on such capital gains 019. Thus, it is clear that assessee has incurred short-term capital losses of Rs. 49,454,381/- (which is subject to securities transaction tax) and also earned short-term capital gain of Rs. 791,221/- (which is not subject to securities transaction tax and taxable as per section 115AD at the rate of 30%). Thus, assessee submits that that short-term capital loss on which securities transaction taxes paid, can be set of against the short-term capital gain which is not subject to securities transaction tax. Further such capital gain is also computed as per section 115AD of the act. 020. It is not the case before us that either in the computation of short-term capital gains or short-term capital loss there is any difference in the manner of computation. Therefore, short-term capital gain arising during the year and short-term capital loss arising during the year are c....
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.... errors in the computation sheet, the learned AR submitted that the assessee has filed a rectification application on 07/02/2025, which is pending consideration. Accordingly, we direct the AO to correctly compute the income of the assessee in accordance with law after considering our aforesaid directions. As a result, grounds no.5 and 6 raised in assessee's appeal are allowed for statistical purposes. 17. The issue arising in ground no.7, raised in assessee's appeal, pertains to the levy of interest under section 234A, 234B, 234C and 234D of the Act, which is consequential in nature. Therefore, the same needs no separate adjudication. 18. The issue arising in ground no.8, raised in assessee's appeal, pertains to the short grant of TDS credit. During the hearing, the learned AR submitted that the assessee has also filed a rectification application before the AO on 07/02/2025 in this regard, which is still pending consideration. Accordingly, we deem it appropriate to restore this issue to the file of the AO with the direction to grant the credit of taxes deducted at source, in accordance with the law, after conducting the necessary verification. We order accordingly. As a resul....
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....ising from sale of securities not subjected to STT instead of short-term capital gains arising from sale of shares subjected to STT; 5. erred in not setting-off the net short-term capital gains arising from sale of share not subjected to STT and short -term capital gains arising from sale of shares subject to STT against brought forward unabsorbed short-term capital loss subjected to STT, contrary to the provisions of section 74 of the Act; 6. erred in not following the decisions of the Jurisdictional Tribunal in the Appellant's own case for AY 2021-22 as well as other binding decisions passed by the Jurisdictional Tribunal and rejecting the set-off merely because the Department has preferred an appeal before the Jurisdictional High Court against one of the orders of the Jurisdictional Tribunal; Arithmetical errors in the computation sheet 7. Without prejudice to above, erred in computing the gross total income chargeable to tax at Rs. 1,05,38,06,590 in the computation sheet, as against Rs. 445,861,930 determined in the impugned order; 8. Without prejudice to above, erred in computing short term capital gains u/s 111A amounting to Rs....
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....separate adjudication. 26. Ground no.13, raised in assessee's appeal, pertains to the initiation of penalty proceedings under section 270A of the Act, which is premature in nature. Therefore, the said ground is dismissed. 27. In the result, the appeal by the assessee is partly allowed for statistical purposes. ITA No. 2152/Mum/2025 IShares Core MSCI EM IMI UCITS ETF - A.Y. 2022-23 28. 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(2X2), Mumbai [the learned 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: General 1. Erred in assessing the total income of the Appellant at ....
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.... Short grant of TDS credit - Rs. 1,997,338 9. erred in granting total TDS credit to Rs. 1,997,338. Initiation of penal proceedings under section 270A of the Act 10. erred in initiating penalty under section 274 r.w.s. 270A of the Act alleging underreporting of income by the Appellant." 29. Ground no.1 is general in nature. Therefore, the same needs no specific adjudication. 30. The issue arising in grounds no.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 was paid. Since we have already adjudicated a similar issue in the foregoing paragraphs, therefore, our findings/conclusions as rendered therein shall apply mutatis mutandis to this appeal. Accordingly, we direct the AO to accept the methodology adopted by the assessee for the computation of the capital gains. As a result, grounds no.2 to 6 raised in assessee's appeal are allowed. 31. As regards the arithmetical errors in the computation sheet, the learned AR submitted that the assessee has filed a rectification application on 07/02/2025, which is pending consider....
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....y the Appellant, i.e., set-off of short-term capital loss (incurred during the year and brought forward from earlier years) in respect of sale of shares subjected to Securities Transaction Tax (STT) first against short-term capital gains earned on the sale of shares not subject to STT, and thereby taxing gross short-term capital gains in respect of the sale of shares not chargeable to STT, earned by the Appellant. 2. The learned DCIT 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. 3. The learned DCIT failed to appreciate that section 70 of the Act does not provide any hierarchy for set-off of losses, the short-term capital loss arising from sale of shares subjected to STT can be first set-off against the short-term capital gains arising from sale of securities not subjected to STT instead of short-term ca....
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....24, which is pending consideration. Accordingly, we direct the AO to correctly compute the income of the assessee in accordance with law after considering our aforesaid directions. As a result, grounds no. 5 and 6 raised in assessee's appeal is allowed for statistical purposes. 39. The issue arising in ground no.7, raised in assessee's appeal, pertains to the short grant of TDS credit. During the hearing, the learned AR submitted that the assessee has also filed a rectification application before the AO in this regard, which is still pending consideration. Accordingly, we deem it appropriate to restore this issue to the file of the AO with the direction to grant the credit of taxes deducted at source, in accordance with the law, after conducting the necessary verification. We order accordingly. As a result, ground no.7 raised in assessee's appeal is allowed for statistical purposes. 40. The issue arising in grounds no.8 and 9, raised in assessee's appeal, pertains to the adjustment of refund and levy of interest under section 234D of the Act. Since the assessee's rectification application on these issues is pending before the AO, we direct the AO to rectify the mistakes in ac....
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....G arising from sale of securities not subjected to STT instead of STCG arising from sale of shares subjected to STT: 5. erred in not following the binding decisions of the Jurisdictional Tribunal and rejecting the set-off merely because the Department has preferred an appeal before the Jurisdictional High Court against one of the orders of the Jurisdictional Tribunal: 6. erred in not granting set-off of the short-term capital gains arising from sale of share not subjected to STT against brought forward unabsorbed short-term capital loss subjected to STT. contrary to the provisions of section 74 of the Act. Arguments on merits of the Appellant's claim of set-off of long-term capital loss 7. erred in setting off the long -term capital losses brought forward from earlier Assessment Years amounting to Rs. 32,15,64,05,787 against the current year's net long-term capital gains amounting to Rs. 3,33,85,21,896, claimed as not chargeable to tax under Article 13 of the India Mauritius (IM Treaty). 8. erred in holding that long term capital gains not chargeable to tax under the IM Treaty form part of the 'total income' of the Appell....
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.... manner of set off of short-term capital loss, which was incurred by the assessee from the transaction in shares on which STT was paid. Since we have already adjudicated a similar issue in the foregoing paragraphs, therefore, our findings/conclusions as rendered therein shall apply mutatis mutandis to this appeal. Accordingly, we direct the AO to accept the methodology adopted by the assessee for the computation of the capital gains. As a result, grounds no.2 to 6 raised in assessee's appeal are allowed. 46. The issue arising in grounds no.7-10, raised in assessee's appeal, pertains to the set off of the taxable (non-grandfathered) brought forward long-term capital loss against the exempt (grandfathered) long-term capital gains. 47. The brief facts of the case pertaining to this issue, as emanating from the record, are: The assessee, in the instant appeal, 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. 869,44,46,360. The return filed by the assessee was selected for ....
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....ions dated 02/12/2024, issued under section 144C(5) of the Act, the learned DRP rejected the objections filed by the assessee and upheld the computation of balance long-term capital loss to be carried forward made by the AO vide draft assessment order. 49. In conformity with the directions issued by the learned DRP, the AO passed the impugned final assessment order under section 143(3) read with section 144C(13) of the Act computing the balance long-term capital loss to be carried forward to the subsequent years at Rs. 2316,78,17,415 as against Rs. 2650,63,29,311 computed by the assessee. Being aggrieved, the assessee is in appeal before us. 50. We have considered the submissions of both sides and perused the material available on record. In the present case, there is no dispute regarding the fact that during the year under consideration, the assessee earned longterm capital gains of Rs. 333,85,21,896, which were claimed as non-taxable in India under Article 13(4) of the India-Mauritius DTAA on the basis that since this long-term capital gains earned from the sale of shares acquired before 01/04/2017 (grandfathered sale), therefore, the gain arising therefrom is not taxable i....
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.... exemption under Article-13(4) of DTAA amount to Rs. 26,36,44,954/-. But the dispute between the parties is whether it will be adjusted with the brought forwarded loss or not. Considering the plain reading of the section that capital loss, after being carried forward, can be set off only against income under the head capital gains. Therefore, existence of a taxable income is a precondition for a set of losses against such income. In this appeal, the gains of Rs. 26,36,44,954/- are admittedly exempt by virtue of article 13(4) of the treaty. The said gains, therefore, cannot be termed as income for the purpose of section 74 of the Act. We relied on the orders of the Coordinate Bench of ITAT-Mumbai in the cases of Swiss Finance Corporation (Mauritius) Ltd(supra) and J.P. Morgan India Investment Company Mauritius Ltd(supra). In our considered view the answer is against revenue. The exempted income is not a part of taxable Gross Total Income. The non-grandfathered LTCG will be adjusted with brought forwarded loss, following the order of Goldman Sachs Investments (Mauritius) Ltd.(supra). The orders which are relied on by the ld. DR are distinguishable. The impugned final assessment order....
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....resent fact is key factor and therefore, what is not expressly granted is not permitted. 6.4.4. In so far as, applicability of good faith in interpreting the treaty provisions, we note that good faith differs from most of the other elements under the Viena rules. It applies to the whole process of interpreting for treaty rather than solely to the meaning of particular words or phrases within it. Although, it is difficult to give precise content to the concept generally, it does include one principle that applies to the interpretation of specific terms used in a treaty, commonly described as the principal "effectiveness". The aspect of the principle of effectiveness is preferring an interpretation that fulfils the aims of the treaty and the intent of the contracting states as given in various Articles. 6.4.5. Applying the above rules to Article 13(4) of India Mauritius DTAA, it is clear that non taxability of the capital gains in India prior to 01/04/2017 cannot act to the disadvantage of the tax payer. This is because section 90(2) is clear to mean that Government of India entered into DTAA with the Government of Mauritius, according to which the capital gains is ....
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....ndia- Japan tax treaty. The provisions of the Indian Income-tax Act must, therefore, apply to that extent. Then comes the objection of the revenue that in the event of the assessee not opting for treatment on the basis of India-Japan tax treaty this year, he will be shut out from availing the benefits of the said treaty in the subsequent years. We see no support for this proposition. Under the Income-tax Act, every year is an independent unit, and it is for the assessee to examine whether or not, in the light of the applicable legal provisions and in the light of the precise factual position, the provisions of the Income-tax Act are beneficial to him or that of the applicable double taxation avoidance agreement. There is no specific bar on such an approach of the assessee, and in the absence thereof, we cannot impose the same. In any event, this question is relevant only in the year in which the assessee claims the treaty benefits and not in this year in which the provisions of the Act are clearly more beneficial to the assessee, and, therefore, the assessee does not claim the treaty protection. Just because the assessee may, in Assessing Officer's perception, may claim treaty ....
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....e head "capital gains". Even under short term capital gains, different transactions will be different sources of income resulting in short term capital gains/loss. Likewise, different transactions of long term capital assets will be different sources of income for an assessee to arrive at long term capital gains/loss. This is reflected in the scheme of computation of capital gains provided in section 48 where gains or loss is computed on the basis of individual asset and transaction and not on the basis of class of assets. Therefore, we have to agree with the argument of the learned senior counsel that every transaction of a property is a different source of income for the assessee. Head of income is not the source of income. Source of income is having the direct nexus with the stream or fountain out of which the income springs to the assessee. Head of income is provided for clubbing purpose of those like minded incomes derived from different sources for the purpose of aggregation and allowable deductions. (emphasis supplied) 6.5.1. From the above one can infer that there is no basis in grouping long term/short term capital assets. It can also be inferred that, long ter....
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.....(supra) reiterated the position that the assessee is entitled to the benefit of Article-13 of DTAA in respect of capital gains and allowed carry forward of capital loss under the provisions of the Act. For the sake of completeness relevant extracts of the findings of the Coordinate Bench are reproduced herein under:- "12. ..........We are unable to comprehend that now when admittedly the short term and long term capital gains earned by the assessee from transfer of securities during the year in question are exempt under Article 13 of the India-Mauritius Tax Treaty, where would there be any occasion for seeking adjustment of the brought forward STCL against such exempt income. Our aforesaid view is squarely covered by the order of the ITAT, Mumbai in the case of Flagship Indian Investment Company (Mauritius) Lid. (supra). In the case of the assessee before the Tribunal that pertained to A. Y. 2005-06 the assessee had brought fonvard capital loss of Rs. 87,06,49,335/-from transfer of securities in A.Y. 2002-03. The aforesaid loss was determined in the hands of the assessee vide an intimation under Sec. 143(1) for A.Y 2002-03. Observing, that since the capital gains were not....
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....erit, is thus rejected. At this stage, we may herein observe that it is for the assessee to examine whether or not in the light of the applicable legal provisions and the precise factual position the provisions of the IT Act are beneficial to him or that of the applicable DTAA. In any case, the tax treaty cannot be thrust upon an assesses. In case the assessee during one year does not opt for the tax treaty, it would not be precluded from availing the benefits of the said treaty in the subsequent years. Our aforesaid view is fortified by the order of the ITAT, Pune in Palm Computer Systems Ltd. (supra). We thus in terms of our aforesaid observations, not being able to persuade ourselves to subscribe to the view taken by the A.O/DRP, who as noticed by us hereinabove had sought adjustment of the b/forward STCL against the exempt short term and long term capital gains earned by the assessee during the year in question, thus 'set aside' the order of the A.O in context of the issue under consideration. Accordingly, we direct the A.O to allow carry forward of the b/forward STCL of Rs. 3926,36,70,910/- to the subsequent years." From the reading of above decisions, it is e....
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....pose of determining the rate at which income-tax is payable, except where the statute in terms excludes these sums from the total income of the assessee. It is pointed out that in Section 4, sub-section (3), certain incomes, profits or gains falling within the classes mentioned in that sub-section are not to be included in the total income of the person receiving the income, and Mr. Joshi argues that except in these cases, in every other case, although the tax is not payable on certain sums, they must be included in the total income for the purpose of determining the rate. It is therefore argued that although under Section 25(4) an exemption is given to the assessee because there is a succession to the business carried on and no tax is payable by the assessee, the sum which is exempted under this sub-section does form part of the total income for the purpose of determining the rate. Total income is defined in Section 2(15) of the Act, and it means total amount of income, profits and gains computed in the manner laid down in this Act. Therefore, it would be erroneous to suggest that total income is to be determined only in the light of Section 4, sub-section (3), of the Act. How tot....
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....cceeded in pointing out to us any provision in the Act whereby this particular sum covered by Section 25 (4) has been made a part of the total income of the assessee. Therefore, in my opinion, the share of the profit of the assessee in the firm of S.B. Billimoria & Co., in the accounting year 1942 cannot be included in the total income of the assessee for ascertaining the rate of income-tax. 7.2. It is thus clear from the above observation from the Hon'ble Bombay high court that, income does not form part of the total income do not enter the computation of the total income at all applying the above principle above ratio to the present facts of the case the capital gains that are already exempt under the DTAA which are binding on the parties being exempt in India, cannot enter the computation of total income of assessee in India. Therefore, setting off the loss suffered by the assessee from sale of shares of Maharana, against the gains earned from sale of shares of Maharana would tantamount to taxing the gain in India which is in violation of Article 13(3)(4) of DTAA as it stood prior to amendment. 8. Now we shall examine the provision relating to carry forward of ....
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....tains to the short grant of TDS credit. During the hearing, the learned AR submitted that the assessee has also filed a rectification application before the AO on 07/02/2025 in this regard, which is still pending consideration. Accordingly, we deem it appropriate to restore this issue to the file of the AO with the direction to grant the credit of taxes deducted at source, in accordance with the law, after conducting the necessary verification. We order accordingly. As a result, ground no.13 raised in assessee's appeal is allowed for statistical purposes. 56. The issue arising in grounds no. 14 and 15, raised in assessee's appeal, pertains to the levy of interest under sections 234B and 234C of the Act, which is consequential in nature. Therefore, the same needs no separate adjudication. 57. Ground no.16, raised in assessee's appeal, pertains to the initiation of penalty proceedings under section 270A of the Act, which is premature in nature. Therefore, the said ground is dismissed. 58. In the result, the appeal by the assessee is partly allowed for statistical purposes. ITA No. 2149/Mum/2025 IShare India 50 ETF - A.Y. 2022-23 59. In this appeal, the a....
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....e the Jurisdictional High Court against one of the orders of the Jurisdictional Tribunal; Failure to allow of set-off of brought forward long-term capital losses 7. erred in setting off the long -term capital losses brought forward from earlier Assessment Years amounting to Rs. 1,96,12,42,731 against the current year's net long-term capital gains amounting to Rs. 40,82,09,257, claimed as not chargeable to tax under Article 13 of the India Mauritius (IM Treaty). 8. erred in holding that long-term capital gains not chargeable to tax under the IM Treaty form part of the 'total income' of the Appellant as per section 2(24) of the Act read with section 4 and 5 of the Act. 9. erred in holding that mode of computation of capital gains should be as per the provisions of the Act and the provisions of IM treaty should be applied only to the 'net' capital gain which forms part of total income; 10. failed to appreciate that as per section 90(2) of the Act, each provision of the Act should be considered separately and therefore for determining 'total income', the income under head "Capital gains" has to be first determined....
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....this appeal. Accordingly, the AO is directed to allow the exemption of the entire long-term capital gains earned by the assessee from the transactions which are covered under the provisions of Article 13(4) of the India-Mauritius DTAA. Further, the AO is directed to allow the set off of long-term capital loss brought forward from the previous years against the net long-term capital gains accrued during the year from the non-grandfathered sale of shares. Accordingly, the impugned order on this issue is set aside, and grounds no.7-10 raised in assessee's appeal are allowed. 63. As regards the arithmetical errors in the computation sheet, the learned AR submitted that the assessee has filed a rectification application on 07/02/2025, which is pending consideration. Accordingly, we direct the AO to correctly compute the income of the assessee in accordance with law after considering our aforesaid directions. As a result, grounds no.11 and 12 raised in assessee's appeal are allowed for statistical purposes. 64. The issue arising in ground no.13, raised in assessee's appeal, pertains to the short grant of TDS credit. During the hearing, the learned AR submitted that the assessee has....
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....9;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 hierarchy for set-off, the short-term capital loss arising from sale of shares subjected to STT can first be set-off against the short-term capital gains arising from sale of securities not subjected to STT instead of short-term capital gains arising from sale of shares subjected to STT; 5. erred in not granting set-off of the unabsorbed brought forward short-term capital losses against the short-term capital gains (not subject to STT) of the year under consideration. 6. erred in not following the binding decisions of the Jurisdictional Tribunal and rejecting the set-off merely because the Department has preferred an appeal before the Jurisdictional High Court against one of the orders of the Jurisdictional Tribunal; ....
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....udicated a similar issue in the foregoing paragraphs, therefore, our findings/conclusions as rendered therein shall apply mutatis mutandis to this appeal. Accordingly, we direct the AO to accept the methodology adopted by the assessee for the computation of the capital gains. As a result, grounds no.2 to 6 raised in assessee's appeal are allowed. 71. The issue arising in grounds no.7-10, raised in assessee's appeal, pertains to the set off of the taxable (non-grandfathered) brought forward long-term capital loss against the exempt (grandfathered) long-term capital gains. Since we have already adjudicated a similar issue in the foregoing paragraphs, therefore, our findings/conclusions as rendered therein shall apply mutatis mutandis to this appeal. Accordingly, the AO is directed to allow the exemption of the entire long-term capital gains earned by the assessee from the transactions which are covered under the provisions of Article 13(4) of the India-Mauritius DTAA. Further, the AO is directed to allow the set off of long-term capital loss brought forward from the previous years against the net long-term capital gains accrued during the year from the non-grandfathered sale of sh....
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.... 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 hierarchy for set-off, the short-term capital loss arising from sale of shares subjected to STT can first be set-off against the short-term capital gains arising from sale of securities not subjected to STT instead of short-term capital gains arising from sale of shares subjected to STT; 5. erred in not granting set-off of the unabsorbed brought forward short-term capital losses against the short-term capital gains (not subject to STT) of the year under consideration. 6. erred in not following the binding decisions of the Jurisdictional Tribunal and rejecting the set-off merely because the Department has preferred an appeal before the Jurisdictional High Court against one of the orders of the Jurisdictional Tribunal; Failure to allow of set-off of brought forward long-term capital losses 7. erred in setting off the lo....
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....gs under section 270A of the Act 17. erred in initiating penalty under section 270A of the Act alleging underreporting of income by the Appellant;" 76. Ground no.1 is general in nature. Therefore, the same needs no specific adjudication. 77. The issue arising in grounds no.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 was paid. Since we have already adjudicated a similar issue in the foregoing paragraphs, therefore, our findings/conclusions as rendered therein shall apply mutatis mutandis to this appeal. Accordingly, we direct the AO to accept the methodology adopted by the assessee for the computation of the capital gains. As a result, grounds no.2 to 6 raised in assessee's appeal are allowed. 78. The issue arising in grounds no.7-10, raised in assessee's appeal, pertains to the set off of the taxable (non-grandfathered) brought forward long-term capital loss against the exempt (grandfathered) long-term capital gains. Since we have already adjudicated a similar issue in the foregoing paragraphs, therefore, our findings/conclusions as....
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.... 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 AÖ"] in pursuance of the directions under section 144C(5) of the Act issued by the Hon'ble DRP - I, Mumbai dated 4 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: Ground of Appeal No. 1: General 1. erred in assessing the total income of the Appellant at Rs. 31,266,588,050 instead of the returned income of Rs. 19,205,442,980; 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 Securities Transaction Ta....
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.... be considered separately and therefore for determining 'total income', the income under head "Capital gains* has to be first determined considering the provisions of the Act or the treaty. whichever is more beneficial and once it is determined that the grandfathered gains are not chargeable to tax in India as per Article 13(4) of the IM Treaty and do not form part of the total income, the question of set off of brought forward losses there against does not arise. Arithmetical errors in the computation sheet 11. erred in computing the income from other sources at Rs. 31,26,64,88,041 in the computation sheet, as against Rs. 5,64,49,35,672 determined in the impugned order; and accordingly computed tax liability on the aforementioned additional income of Rs. 25,62,15,52,369 at the rate of 40% which has resulted in erroneous addition to tax liability. Levy of interest under section 234B of the Act - Rs. 3,97,95,94,668 12. erred in levying interest under Section 234B of the Act amounting to Rs. 3,97,95,94,668; Levy of interest under section 234C of the Act - Rs. 15,241 13. erred in levying interest under Section 234C of the A....
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....al, pertains to the levy of interest under sections 234B and 234C of the Act, which is consequential in nature. Therefore, the same needs no separate adjudication. 90. Ground no.14, raised in assessee's appeal, pertains to the initiation of penalty proceedings under section 270A of the Act, which is premature in nature. Therefore, the said ground is dismissed. 91. In the result, the appeal by the assessee is partly allowed for statistical purposes. ITA No. 2154/Mum/2025 IShares MSCI All Country Asia Ex Japan ETF - A.Y. 2022-23 92. 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 AO'] in pursuance of the directions under section 144C(5) of the Act issued by the Hon'ble DRP - I, Mumbai dated 4 December 2024 on the following grounds, each of which is without prejudice to and independent of the others: On the facts and in ....
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....imed as not chargeable to tax under Article 13 of the India Mauritius (IM Treaty): 8. erred in holding that long-term capital gains not chargeable to tax under the IM Treaty form part of the 'total income' of the Appellant as per section 2(24) of the Act read with section 4 and 5 of the Act; 9. erred in holding that mode of computation of capital gains should be as per the provisions of the Act and the provisions of IM treaty should be applied only to the 'net' capital gain which forms part of total income; 10. failed to appreciate that as per section 90(2) of the Act, each provision of the Act should be considered separately and therefore for determining total income', the income under head "Capital gains has to be first determined considering the provisions of the Act or the treaty, whichever is more beneficial and once it is determined that the grandfathered gains are not chargeable to tax in India as per Article 13(4) of the IM Treaty and do not form part of the total income, the question of set off of brought forward losses there against does not arise; Arithmetical errors in the computation sheet 11. erred in co....
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....tains to the set off of the taxable (non-grandfathered) brought forward long-term capital loss against the exempt (grandfathered) long-term capital gains. Since we have already adjudicated a similar issue in the foregoing paragraphs, therefore, our findings/conclusions as rendered therein shall apply mutatis mutandis to this appeal. Accordingly, the AO is directed to allow the exemption of the entire long-term capital gains earned by the assessee from the transactions which are covered under the provisions of Article 13(4) of the India-Mauritius DTAA. Further, the AO is directed to allow the set off of long-term capital loss brought forward from the previous years against the net long-term capital gains accrued during the year from the non-grandfathered sale of shares. Accordingly, the impugned order on this issue is set aside, and grounds no.7-10 raised in assessee's appeal are allowed. 96. As regards the arithmetical errors in the computation sheet, the learned AR submitted that the assessee has filed a rectification application on 07/02/2025, which is pending consideration. Accordingly, we direct the AO to correctly compute the income of the assessee in accordance with law af....