Exempt LTCG Under India-Mauritius DTAA Not Adjustable Against Taxable Losses: ITAT Mumbai

Bay Capital India Fund Limited. Vs Additional Director of Income Tax (ITAT Mumbai)

Conclusion:  Long-term capital gains exempt under the India-Mauritius Double Taxation Avoidance Agreement (DTAA) could not be adjusted against taxable short-term or long-term capital losses incurred by the assessee as adjusting taxable losses against exempt gains would result in indirectly taxing exempt income, which would violate the provisions of the DTAA and Section 90(2).

Held: Assessee-company was incorporated in Mauritius and registered as a Foreign Por

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