TaxTMI 
TaxTMI 
2025 (6) TMI 1131
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....ng 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 pertaining to the same are discussed accordingly. IT....
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....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 capital loss, which was incurred by the assessee from the transaction in shares on which Securities Transaction Tax ("STT") was paid. 3. The brief facts of the case pertaining ....
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....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 detailed objections, inter-alia, against the aforesaid addition made by the AO. Vide directions dated 05/12/2024, issued under section 144C(5) of the Act, the learned DRP rejected the objections filed by the assessee and uphel....
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....o 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 short-term capital loss on which securities transaction taxes are paid, and therefore such loss should be set-off against the short-term capital gain irrespective of the tax bracket of such gain and losses. 017. The only dispute between the assessee and....
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....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 computed in a similar manner as provided under section 48 to section 55 of the income tax act. Further as we have already stated that section 48 to section 55 of the income tax act does not lay down any rate of tax payable on short-term capital gain. 021. Therefore, we do not find any reason to ....
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.... 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 result, ground no.8 raised in assessee's appeal is allowed for statistical purposes. 19. Ground no.9, 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. 20. In the result, the appeal by the assessee is partly allowed for s....
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....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. 88,08,601 twice and taxed at 15% with surcharge and cess in the computation sheet. 9. Without prejudice to above, erred in not setting off the net long term capital gains chargeable to tax against brought forward long term capital loss in the computation sheet as done so in the impugned order. 10. Without prejudice to above, erred in computing the income taxable at special rate at Rs. 1,062,615,191 as against Rs. 445,861,930 determined in the impugned order....
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....ve 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 Rs. 2,147,211,850 instead of the returned income of Rs. 2,072,904,040; 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 ....
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....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 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, ground no.7 raised in assessee's appeal is allowed for statistical purposes. 32. The issue arising in ground no.8, raised in assessee's appeal, pertains to the levy of interest, which is consequential in nature. Therefore, the same needs no separate adjudication. 33. The issue arising in ground no.9, 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 ....
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....se 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 capital gains arising from sale of shares subjected to STT. 4. The learned DCIT 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. Ground of Appeal No. 2: Errors in the computation sheet annexed to the assessment order 5. The learned DCIT erred in incorrectly computing gross total income (after set-off of brought forward and current year losses) in the computation sheet annexed to the order at INR 3,721,678,023 instead of INR 1,373,953,214. 6. Consequent to point 6, the learned DCIT erred in incorrectly computing taxes (....
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....dingly. 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 accordance with law. As a result, grounds no.8 and 9 raised in assessee's appeal are allowed for statistical purposes. 41. Ground no.10, 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. 42. In the result, the appeal by the assessee is partly allowed for statistical purposes. ITA No. 2085/Mum/2025 IShares Core MSCI Emerging Markets ETF - A.Y. 2022-23 43. 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 (Inte....
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....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 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 com....
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.... 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 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 under the head "Capital Gains", the assessee has brought forward the long-term capital loss of previous years amounting to Rs. 3215,64,05,787, and at the same time, the assessee has claimed net long-term capital gains amounting to Rs. 333,85,21,896 on the sale of shares acquired before 01/04/2017 (grandfathered sale) as exempt under Article 13(4) of the India-Mauritius Double Taxation Avoidance Agreement ("DTAA"). The AO, vide draft assessment order dated 24/03/2024 passed under section 144C (1) of the Act, held that the assessee had opted for the benefit of India-Mauritius DTAA and at the same time the benefit of the Act. However, the assessee has a choice to be governed either by the Act or by the provisions of the DTAA. The AO further held that for any receipt to be exempt under the DTAA, the same must be taxa....
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....TAA 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 in India. Further, it is undisputed that the long-term capital loss of previous years, which was brought forward to the current year, was from the sale of shares which were acquired after 01/04/2017. As is evident from the record, the assessee in its return of income for the year under consideration, claimed the long-term capital gains earned by it on the grandfathered sale as exempt from taxation in India, while the long-term capital loss brought forward from the previous years was set off against the net long-term capital gains accrued during the year from the non-grandfathered sale of shares. However, the AO set off the brought forward long-term capital loss from the non-grandfathered sale against the long-term capital gains earned by the assessee from the grandfathered sale. As per the assessee, by setting off the brought forward long-term capital loss against the long-term capital gains, which is exempt from tax in India as per Article 13(4) of the India-Mauritius DTAA, the Revenue has rest....
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.... 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 is dismissed. The appeal of the assessee is succeeded." 52. We find that a similar issue also came up for consideration before another Co-ordinate Bench of the Tribunal in Matrix Partners India Investment Holdings, LLC vs DCIT, in ITA No.3097/Mum/2023, for the assessment year 2020-21. The Co-ordinate Bench, vide order dated 29/01/2025, held that the capital gains that are already exempt under the provisions of DTAA cannot enter into computation of total income of the assessee in India, and therefore, the loss incurred by the taxpayer from the sale of non-grandfathered shares cannot be set off against the gain, which is exempt from taxation in India, as per Article 13(4) of the India Mauritius DTAA. The Co-ordinate Bench further held that the taxpayer is entitled to carry forward the loss arising from the sale of shares to the subsequent year. The relevant findings of the Co-ordinate Bench, in the aforesaid decision, are reproduced as follows: - "6.4.2. It is noted that, Article 31 of Viena conventio....
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....use 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 not taxable in India. However, the provisions of the act shall apply to the extent they are more beneficial to the tax payer. 6.4.6. The Ld.AR in support relied on following observations from the decision of Hon'ble Pune Bench in case of Patni Computers Systems Ltd., reported in (2008) 114 ITD 159 8. The law laid down by the Hon'ble Supreme Court in binding on us under Article 141 of the Constitution of India. The prevailing legal position, therefore, is that once an income is held to be taxable in a tax jurisdiction under a double taxation avoidance agreement, and unless there is a specific mention that it can also be taxed in the other tax jurisdiction, the other tax jurisdiction is denuded of its powers to tax the same. To that extent, the worldwide basis of taxation in the scheme of the Indian Income-tax Act is no longer applicable in a situation provisions of a double taxation avoidance agreement entered into under section 90 apply. The next question then arises whether in a loss situation in the PE State, as is the cas....
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....the assessee does not claim the treaty protection. Just because the assessee may, in Assessing Officer's perception, may claim treaty protection in a subsequent year, the treaty provisions cannot be thrust on the assessee this year as well. In this view of the matter, the assessee was indeed eligible to claim taxation on worldwide basis, disregard the scheme of taxability under the India-Japan tax treaty, and, in effect, claim deduction of loss incurred by the PE in Japan. The CIT(A) was thus justified in his conclusion to the effect that losses of assessee's PE in Japan are to be taken into account while computing assessee's total income liable to tax in India. Now coming to the contention whether each transaction can be considered as a separate source of income. 6.5. The Ld.AR placed reliance on the following observations by Hon'ble Mumbai Special Bench in case of Montgomery Emerging Market Fund reported in (2006) 100 ITD 217 in support of the above argument. Hon'ble Special bench observed the distinction between 'source of income' and 'head of income' and that there can be multiple source of income under the same head of income. Hon'ble Special Be....
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....at there is no basis in grouping long term/short term capital assets. It can also be inferred that, long term and short term are different sources of income. Further, Hon'ble Special bench also observed that even the different short term assets and long term assets involved in the respective transactions are again different sources of income. In the present facts of the case, loss earned from sale of shares of Maharana and the gain earned from sale of shares of Maharana are therefore different sources of income. And further as per the observations of Hon'ble Special Bench, even under short term/long term computation, every transaction is a different source. 6.5.2. Further, the Co-ordinate Bench of this Tribunal in the case of Credit Suisse (Singapore) Co. (Mauritius) Ltd. In ITA No. 1107 and 1108/Mum/2022, upheld the theory of the segregation of capital gain for drawing DTAA to the extent of more beneficial to the assessee. The relevant finding of the Tribunal is reproduced as under: "8. In the case of Flagship Indian Investment Co (Mauritius) Ltd.(supra), the assessee had claimed benefit of Article -13 of the DTAA in respect of 'Capital Gains' and had sought to carry f....
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....er Sec. 143(1) for A.Y 2002-03. Observing, that since the capital gains were not taxable in India as per Article 13 of the Indian- Mauritius Tax Treaty, the A.O being of the view that capital loss would also be exempted, and therefore, the assessee would not be entitled to claim the set-off of the same against the capital gains for the relevaye assessment years. On benefit of carry forward of such capital losses of the earlier years, thus, declined the appeal, the CIT(A) upheld the order of the A.O. On further appeal, the Tribunal concluded that the assessee was fully justified in claiming the carry forward of the capital losses of the earlier years to the subsequent years, and both the A.O and the CIT(A) were in error in not allowing the same. Accordingly, the A.O was directed to allow the carry forward of the capital losses of the earlier vears to the subsequent years, according to law. As in the aforesaid case, in the case of the present assessee before us, as the short term and long term capital gains earned by the assessee from transfer of securities during the year in question are admittedly exempt from tax under Article 13 of the India- Mauritius tax treaty, therefore, the b....
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....uent years." From the reading of above decisions, it is evident that there is no impedement in segregating capital losses and capital gains from different source of income under the head 'capital gains' for the purpose of claiming the benefit of DTAA/ provisions of the Act as the case may be, whichever is more beneficial to the assessee in terms of section 90(2) of the Act." 7. It is relevant to understand the scheme of the act, to find out if the capital gains earned by the assessee from sale of shares that does not form part of total income of virtue of DTAA would enter the computation of total income. Section 4 of the act is the charging section that describes the rates on income charged for a particular assessment year. Section 2(45) defines the total income to be the amount of income referred to section 5 and computed in the manner laid down in the Act. Section 14 of the act categorises income under various heads of income like salaries, income from house property, profit and gains from business of profession, capital gains and income from other sources. Section 66 to 80 deals with the aggregation of income and set off /carry forward of loss. 7.1. Hon'ble Bombay ....
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...., sub-section (3), of the Act. How total income is to be computed and determined depends upon the various provisions contained in the Act as a whole. Then we might look at various sections which provide for exemptions from the payment of tax. There is Section 7 which contains various provisos which cover sums not liable to tax. Similarly Section 8. Section 14 also contains exemptions with regard to certain sums on which no tax is payable, and Section 15 contains exemptions in cases of life insurance. It will be noticed that the language used in all these sections, to which I have referred, is similar, if not indentical, with the language used in Section 25(4), viz., that the tax is not payable on these different sums. Now, if Mr. Joshi's contention was sound, then with regard to these various exemptions which I have enumerated, although tax is not payable, they should all be included in the total income for the purpose of determining the rate payable in respect of income-tax. Now, the short and conclusive answer to that contention is Section 16 of the Indian Income-tax Act. It is that section which in terms includes in the total income of an assessee only certain sums which are....
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....ing to carry forward of the loss suffered from sale of shares of Maharana the assessee in the present case as carry forwarded long-term capital loss as per section 74 of the Act. Reference is made to the CBDT Circular No. 22 of 1944 dated 29/07/1944 that states that: "If the total income is a loss it has to be carry forwarded subject to the provisions us. 24(2) of the Indian income tax act 1922 and cannot be set off against any income which does not form part of the total income." The circular also stated that, "the non resident otherwise would not get any relief in the Indian Taxation on account of loss incurred by in India." Accordingly the Ld.AO is directed to grant the carry forward of the loss as claimed by the assessee." 53. Therefore, from a careful perusal of these decisions, it is evident that all the submissions of the Revenue, raised in the instant appeal, have already been considered by the Co-ordinate Benches. Thus, respectfully the decisions of the Co-ordinate Bench as cited supra, we are of the considered view that the long-term capital gains earned by the assessee from the transactions, which are grandfathered as per the provisions of Article 13(4) of the India- Ma....
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....see 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 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. 3,82,18,15,110 instead of the returned income of Rs 3,41,36,05,850. 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 Tax (STT"): 3. failed to apprec....
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....e 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. Without prejudice to that stated above, erred in computing the brought forward losses and gross total income in the computation sheet as against the impugned order. 12. Without prejudice to above, erred in computing the gross total income at Rs. 5,49,27,94,236 in the computation sheet, as against Rs. 3,82,18,15,110 determined in the impugned order; 13. Without prejudice to above, erred in granting TDS credit amounting to Rs. 62,11,65,557 has which has resulted in short grant of TDS to the extent of Rs. 1,60,433. 14. Without prejudice to the above, erred in levying interest under section 234B amounting to Rs. 7,94,29,712 in the computation sheet, annexed with the impugned order; Initiation of penal proceedings under section 270A of the Act 15. erred in initiating penalty under section 270A of the Act alleging misreporting of income by the Appellant;" 60. Ground no.1 is general in nature. Therefore, the same....
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....ssue 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. 65. The issue arising in ground no.14, raised in assessee's appeal, pertains to the levy of interest under section 234B of the Act, which is consequential in nature. Therefore, the same needs no separate adjudication. 66. Ground no.15, 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. 67. In the result, the appeal by the assessee is partly allowed for statistical purposes. ITA No. 2150/Mum/2025 IShare MSCI Emerging Markets ETF - A.Y. 2022-23 68. 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....
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.... Rs. 6,86,52,70,391, 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 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. Without prejudice to th....
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.... 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. 73. 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. 74. In the result, the appeal by the assessee is partly allowed for statistical purposes. ITA No. 2151/Mum/2025 IShare Core MSCI Total International Stock ETF - A.Y. 2022-23 75. 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 - 1, Mumbai dated 5 December 2024 on the following grounds, each of which is without prejudice to and independent On the facts ....
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....ith 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. Without prejudice to that stated above, erred in computing the brought forward losses and gross total income in the computation sheet as against the impugned order. 12. Without prejudice to above, erred in computing the gross total income at Rs. 1,09,99,12,790 in the computation sheet, as against Rs. 1,00,35....
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....s issue is set aside, and grounds no.7-10 raised in assessee's appeal are allowed. 79. 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.11-14 raised in assessee's appeal are allowed for statistical purposes. 80. The issue arising in ground no.15, 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 result, ground no.15 raised in assessee's appeal is allowed for statistical purposes. 81. The issue arising in ground no.16, raised i....
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....et-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 following the binding decisions of the Jurisdictional Tribunal pronounced in favour of the Fund pertaining to AY 2021-22 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. Without prejudice to the above, erred in not granting set-off of the net 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. 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. 26,17,71,96,254 against the current year's net long-term capital gains amounting to Rs. 12,06,10,45,056, claimed as not chargeable to tax under Article 13 of the India Mauritius (IM Treaty): 8. erred in holding that long term c....
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....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. 87. 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 shares. Accordingly, the impugned order on this issue is set aside, and grounds no.7-10 raised in assessee's appeal are allowed. 88. As regards the arithmetical errors in the computation s....
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.... certain cases and therefore, gains arising on transactions subjected to STI 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 ST instead of short-term capital gains arising from sale of shares subjected to STT; 5. erred in not following the decision 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; 6. Without prejudice to the above, 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 provi....
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....the impugned order which is not aligned as per the mechanism provided in the order and as per the directions issued by the Hon'ble DRP. Short-grant of taxes deducted at source (TDS) 15. Erred in computing TDS credit amounting to Rs. 5,51,76,149 as against TDS credit claimed in the return of income amounting to Rs. 5,70,62,930. Levy of interest under section 234C of the Act - Rs. 1,958 16. Erred in levying interest under Section 234C of the Act amounting to Rs. 1,958; Initiation of penal proceedings under section 270A of the Act 17. Erred in initiating penalty under section 270A of the Act alleging misreporting of income by the Appellant." 93. Ground no.1 is general in nature. Therefore, the same needs no specific adjudication. 94. 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 t....