Steadview Capital Mauritius Limited Vs CIT (ITAT Mumbai)
The Income Tax Appellate Tribunal (ITAT), Mumbai, has set aside a revision order issued by the Commissioner of Income Tax (CIT) against Steadview Capital Mauritius Limited. The tribunal’s ruling, delivered on August 18, 2025, determined that the original assessment order was not erroneous or prejudicial to the interests of the revenue, as the Assessing Officer (AO) had conducted adequate inquiries during the initial assessment proceedings. The case centered on the CIT’s invocation of Section 263 of the Income Tax Act, 1961, to revise an assessment completed for the assessment year 2020-21.
Steadview Capital Mauritius Limited, a company incorporated in Mauritius and registered as a foreign portfolio investor (FPI) in India, filed its return for the year, declaring a total income of ₹100,36,28,180. Its case was selected for scrutiny, and the AO issued notices under Section 142(1), to which the assessee furnished detailed information, including specifics on its long-term capital gains (LTCG), long-term capital losses (LTCL), and dividend income. After reviewing these submissions, the AO finalized the assessment on September 20, 2022, accepting the income declared.
Subsequently, the CIT reviewed the records and concluded that the assessment order was “erroneous and prejudicial to the interest of the revenue.” The CIT’s primary contentions were twofold. Firstly, the CIT noted that the assessee had a taxable LTCG of ₹206,68,40,563, which was claimed as exempt under the India-Mauritius Double Taxation Avoidance Agreement (DTAA). The assessee also disclosed a total LTCL of ₹731,02,42,336 from the sale of shares. The CIT argued that the AO failed to ensure that the LTCG was set off against the LTCL under Section 70 of the Act before allowing the carry forward of the remaining loss. Secondly, the CIT contended that the assessee had not furnished documentary evidence to prove beneficial ownership of the interest earned, thereby making it ineligible for the beneficial tax rate under the DTAA. In light of these perceived failures by the AO, the CIT issued a show-cause notice under Section 263 and, in the absence of a reply, passed an order setting aside the original assessment and directing the AO to re-do the assessment afresh.
