iShares Core MSCI Emerging Markets ETF Vs DCIT (ITAT Mumbai)
ITAT Mumbai held that long-term capital gains earned from the transactions, which are grandfathered as per the provisions of Article 13(4) of the India-Mauritius DTAA, doesn’t form part of total income hence cannot be adjusted against the brought forward long-term capital loss incurred by the assessee. Accordingly, order set aside.
Facts- The assessee is a company incorporated in Mauritius, and is registered with the Securities and Exchange Board of India as a Foreign Portfolio Investor. During the assessment proceedings, it was observed that as per the methodology adopted by the assessee for computation of the short-term capital gains, the assessee set off the short-term capital loss (on which STT was paid), which is taxable at 15% u/s. 111A of the Act, against the short-term capital gains (on which STT was not paid), which is taxable at 30% under section 115AD of the Act, even though the assessee was having short-term capital gains (on which STT was paid), which is taxable at 15%.
AO, vide draft assessment order dated 26/03/2025 passed u/s. 144C(1) of the Act, disagreed with the submissions of the assessee and held that the computation of the net short-term capital gains by the assessee is not in order.
