Goldman Sachs (Singapore) Pte Vs ACIT ( ITAT Mumbai)
ITAT Mumbai delivers big relief to Goldman Sachs (Singapore) – Capital gains exempt under DTAA, but capital losses can still be carried forward under the Act
Assessee, Goldman Sachs (Singapore) Pte, is a SEBI-registered Foreign Portfolio Investor & a tax resident of Singapore. It invests in Indian capital markets, earns capital gains, dividend & interest. In AY 2016-17, it earned short-term capital gains of ₹888.94 crore & long-term capital gains of ₹13.18 crore. Since Article 13 of the India–Singapore DTAA grants exclusive taxing rights over such gains to the country of residence, Assessee claimed the gains as exempt in India. At the same time, it had brought forward short-term capital losses of ₹37.55 crore from AY 2014-15 (which were computed under the Act in that year), & claimed them to be carried forward further, without setting them off against the exempt capital gains of the year.
AO rejected this position, holding that if capital gains are exempt under the Treaty, the capital loss also must be treated as “exempt” & therefore cannot be carried forward. He forcibly set off the brought forward loss against the current year gains & denied carry-forward benefit. CIT(A) upheld AO. Assessee appealed.
