Short term capital losses subject to STT can be set off against Short term capital gains not subject to STT

Background:-The Finance Act, 2004 introduced section 111A in the Income-tax Act, 1961 (the Act) prescribing a tax rate of 10 percent on Short Term Capital Gains (STCG) arising from sale of shares on or after 1 October 2004 on a stock exchange which are subject to Securities Transaction Tax (STT). Before this amendment the STCG arising to non-residents (up to 30 September 2004) was taxable at the rate of 30 percent under the provision of section 115AD of the Act. Recently, the Mumbai Income-tax Appellate Tribunal (the Tribunal) in the case of First State Investments (Hongkong) Ltd. [A/C First S...