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2018 (6) TMI 1111 - ITAT MUMBAIIncome from early settlement of forward foreign exchange contract - to be assessed under the head “Capital Gain” OR “Income from Other Sources” - assessee is a tax resident of Singapore - Held that:- The Tribunal in assessee’s own case for assessment year 2005–06 and 2006–07 [2012 (10) TMI 1179 - ITAT MUMBAI] has held that the gain from forward foreign exchange contract has to be treated as capital gain. As a natural corollary the loss arising from such contract has to be treated as capital loss. Capital gain - sale of shares, debt instruments and derivatives - taxability in view of Article–13 of the India–Singapore Tax Treaty - Held that:- Article–13(4) in clear and unambiguous terms expresses itself as not an exemption provision but it speaks of taxability of particular income in a particular State by virtue of residence of the assessee. That being the case, the provisions of Article–24 of India Singapore Tax Treaty does not have much relevance insofar as it relates to applicability of Article–13(4) to income derived from capital gain. The expression ‘exempt’ with reference to the capital gain derived by the assessee, in our view, has been loosely used. On the contrary, the overriding nature of Article 13(4) of the Tax Treaty makes the capital gain taxable only in the country of residence of the assessee. - decided against revenue
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