Florida Retirement System Vs ACIT (ITAT Mumbai)
ITAT Mumbai held that section 70 of the Income Tax Act allows first setting off the short term capital loss against the non STT gains taxable at thirty percent, and then applying the balance against the STT gains taxable at fifteen percent. Accordingly, appeal stands allowed.
Facts- The assessee is an Artificial Juridical Person organised in the United States of America, which has invested in Indian capital markets under a multi manager structure through investment managers registered as Foreign Portfolio Investors with the Securities and Exchange Board of India. The return of the assessee was selected for complete scrutiny under the Computer Aided Scrutiny Selection and a notice u/s. 143(2) was issued.
Pursuant thereto, a Draft Assessment Order u/s. 144C proposing to assess the income at Rs. 9,12,70,56,580. In doing so, AO rejected the manner in which the assessee had set off its short term capital losses against its short term capital gains and, further, made an addition of dividend income earned on American Depository Receipts and Global Depository Receipts on the footing that the underlying securities were shares of Indian companies and that, irrespective of the manner in which tax was deducted and credit reflected, the said dividend had to be offered to tax in the return. Consequently, a final assessment order u/s. 143(3) r.w.s. 144C(13) dated 27 January 2025 was passed. The assessee, being aggrieved, is in appeal before us.
