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2020 (9) TMI 1049 - ITAT MUMBAISetting off the short term capital losses brought forward from earlier AYs against the current year's short term capital gains, claimed as exempt under Article 13 of the IM treaty - Whether carry forward permitted only the balance short term capital losses instead of entire brought forward short term capital losses? - HELD THAT:- As the DRP in its order u/s 144C(5), had directed adjustment of the Long term capital gains as against the b/forward STCL as per Sec. 74(1)(a) of the Act, therefore, pursuant to its aforesaid directions, it had therein directed that its observations recorded would also stand modified. We herein conclude that the assessee is duly entitled for carry forward of its brought forward Long term capital losses to the subsequent years - brought forward STCL of the earlier years are not to be adjusted against the Short term capital gain earned by the assessee during the year in question, we herein direct that on the same basis the brought forward Long term capital losses of the earlier years shall not be set off against the Long term capital gain earned by the assessee from transfer of securities during the year in question i.e A.Y 2013-14. Levying interest u/s 234C - HELD THAT:- As per the ‘Explanation’ to Sec. 234C, for the purpose of computing the interest liability therein contemplated, the tax due on the returned income has to be reduced by any tax deductible at source in accordance with the provisions of Chapter XVII on any income which is subject to such deduction and is taken into account in computing the total income of the assessee. The interest income received by the assessee from Indian Oil Corporation Ltd. was liable for deduction of tax at source, which however, was not done by the payer. Accordingly, tax deductible at source on the aforesaid amount of interest income, as stated by the ld. A.R, and rightly so, had to be excluded from the tax due on the returned income for the purpose of computing the interest liability u/s 234C - See NGC NETWORK ASIA LLC [2009 (1) TMI 174 - BOMBAY HIGH COURT] We are in agreement with the claim of the ld. A.R that the tax deductible at source on the aforesaid interest income received by the assessee from Indian Oil Corporation Ltd. was liable to be excluded at the time of working out the assessee’s liability towards interest under Sec. 234C. We thus direct the A.O to recompute the interest liability under Sec. 234C in terms of our aforesaid observations
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