TaxTMI 
TaxTMI 
2025 (9) TMI 1113
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....AY) 2021-22. 2. The assessee is a non-resident company incorporated in United Kingdom and registered in India as Foreign Portfolio Investor (FPI) under Securities and Exchange Board of India (SEBI) to carry out portfolio investment activities in Indian securities. The assessee filed the return of income for AY 2021-22 on 30.12.2021 declaring a total income of Rs. 12,23,61,400/-. The AO noticed that, during the year under consideration, the Assessee had computed the income under the head "Capital Gains" as under Particulars of Transaction Amount (in Rs.) Amount (in Rs.) INCOME UNDER HEAD 'CAPITAL GAINS' Long-term Capital Loss on Equity shares (4,21,22,784) &nbs....
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....ous decisions of the Co-ordinate Bench and that the Hon'ble Calcutta High Court in the case of CIT v. Rungamatee Trexim (Pvt.) Ltd. [2008] (ITA No. 812 of 2008) while considering a similar issue has taken a view in favour of the assessee. 5. The ld. DR on the other hand relied on the order of the AO. 6. We heard the parties and perused the material on record. We notice that Hon'ble Calcutta High Court in the case of Rungamatee Trexim Pvt. Ltd. (supra) has considered a similar issue and held that "In Ground Nos.5 and 6 the assessee has objected to the mode of set off adopted by the Assessing Officer in assessing income from short term capital cases. During the year under consideration the assessee earned short term cap....
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.... A.O. shown that be accepted in principle that short term capital loss with STT can be legally set off against short term capital gain without STT. According to the assessee, the chronology for the set off by the A.O. was contrary to chronology adopted by the assessee, only because the assessee's mode resulted in concessional rate of the tax being applied to higher amount of short term capital gain which resulted more tax benefit to an assessee. On perusal of the provision of section 70, I find that there is no prohibition nor the Act compels the assessee to first set off short term capital gain with STT against short term capital loss with STT and then allows set off against short term capital gain without STT. In absence of a....
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....gularity and we find that no substantial question of law is involved in this appeal. Hence, we dismiss the appeal." 7. We notice that the ratio laid down by the Hon'ble High Court is that when there is no specific mode of setoff is provided in the Act, the assessee has the option to setoff that is most beneficial to the assessee. We further notice that in the case of First State Investments (Hongkong) Ltd. vs ADITIT) [(2011) 8 ITR(T) 315 (Mum-Trib)] under similar situation, the Assessing Officers rejected Assessee's manner of set-off of STCL in category liable to tax at 15% against STCG taxable at 30%. The Revenue made similar argument as is made in the instant case with regard to expression used in section 70(2), i.e., 'unde....
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...." provides that the income chargeable under the head "Capital gains" shall be computed by deducting from the full value of the consideration received or accruing as a result of the transfer of the capital asset, the expenditure incurred wholly and exclusively in connection with such transfer and the cost of acquisition of the asset along with the cost of any improvement, if any. Thus, the computation of capital gain, which is prescribed under section 48, cannot be confused with the rate of tax liable to be charged on the income under the head 'Capital gain' so computed. Whereas, computation of capital gain is governed by section 48, but the rates of tax, insofar as we are concerned in the present appeal, are governed by sections 111....