Eastspring Investments India Equity Open Ltd Vs DCIT (ITAT Mumbai)
Short term capital loss (STCL) on which STT paid can be set off against short term capital gains (STCG) on which STT not paid
ITAT Mumbai held that as per section 70(2) the short-term capital loss can be set off against gain from any other capital asset. Thus, set off of short-term capital loss (on which STT was paid) against the short-term capital gains (on which STT was not paid) is allowed.
Facts- During the year under consideration, the assessee reported a net short-term capital gains of Rs.175,26,00,094/- by setting off the amount of short-term capital loss [on which Securities Transaction Tax (“STT”) was paid], which is taxable at 15% u/s. 111A of the Act, against the short-term capital gains (on which STT was not paid), which is taxable at 30% u/s. 115AD of the Act, and thereafter, set off the balance loss against the short-term capital gains earned on the transaction of sale of share subjected to STT.
AO, vide draft assessment order dated 20.03.2024 passed under section 144C(1) of the Act, disagreed with the submissions of the assessee and held that in the present case, the assessee has capital gains which are taxable at 15%, whereas the assessee has opted to set off the losses having lower taxability with the gains of higher taxability which is not in accordance with the provisions of the Act. AO passed the impugned final assessment order u/s. 143(3) r.w. section 144C(13) of the Act assessing the total income of the assessee at Rs.1484,76,27,580/-. Being aggrieved, the present appeal is filed.
