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2016 (4) TMI 707 - ITAT MUMBAI

2016 (4) TMI 707 - ITAT MUMBAI - TMI - Allowance of STCL on STT paid transactions to be set off against the STCG on non-STT paid transactions - Held that:- Following the aforesaid decision of the co-ordinate bench of this Tribunal in the case of First State Investments (Hong Kong) (2009 (7) TMI 908 - ITAT MUMBAI ), we hold that the set off as proposed by the assessee in the case on hand is to be allowed, and accordingly uphold the order of the Ld. CIT(A) in directing the Assessing Officer to per .....

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te that the assessee has in fact paid STT in respect of this transaction. Before us, Revenue has failed to controvert both the evidence placed before us and the finding of the Ld.CIT(A) in this regard. In this factual matrix of the case, we uphold the order of the Ld. CIT(A) on this issue in directing the Assessing Officer to tax this amount of ₹ 7,04,43,724/- @ 10%.- Decided against revenue - ITA No. 4656 /MUM/2013 - Dated:- 29-2-2016 - SHRI JASON P. BOAZ (AM) AND SHRI SANDEEP GOSAIN (JM) .....

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SEBI regulations for Asst. year 2008-09, the assessee filed its return of income on 30/09/2008 declaring total income of ₹ 48,90,51,424/-. The case was selected for scrutiny. In the course of assessment proceedings the assessee was provided with copy of AIR and requested to reconcile the entries with the custodian trade report and the bank statements. The assessment was completed u/s 143(3) r.w.s.144C(3) of the Income Tax Act, 1961 (in short the Act ) vide order dt. 02/02/2011, wherein th .....

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an appeal before the CIT(Appeals)-10, Mumbai. The Ld. CIT(A) allowed the assessee s appeal vide the impugned order dt. 28/03/2013. 3. Aggrieved by the order of the CIT(Appeals)-10, Mumbai dt. 28/03/2013 for Asst. year 2008-09, the revenue has preferred this appeal before the Tribunal raising the following grounds:- 1) "On the facts and in the circumstances of the case and in law, whether the Ld. CIT(A) erred in allowing STCL (on STT paid transactions) to be set-off against the STCG. (on non .....

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officer clearly established in the assessment order that STCG amounting to ₹ 7,04,43,724/- to be taxed @ 30%. 3). The appellant prays that the order of the CIT(A) on the above ground(s) be set aside and that of the Assessing Officer be restored. 4). The appellant craves leave to amend or alter any ground or add a new ground which may be necessary. 4. Ground at Sr. No. 3 and 4 being general in nature, no adjudication is called for thereon. 5. Grounds No. 1 5.1 In this ground, Revenue conten .....

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AR supported the finding rendered in the impugned order of the Ld. CIT(A) on this issue. It is submitted by the Ld.AR that the assessee has an option to set off its STT paid loss against non-STT paid income even though it has STT paid income available for set off. It was contended that the Ld. CIT(A) in allowing the assessee appeal on this issue correctly followed the decision of the co-ordinate bench of this Tribunal in the case of First State Investments (Hong Kong) vs. ADIT [(2010) 132 TTJ ( .....

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case of First State Investments (Hong Kong) vs. ADIT [(2010) 132 TTJ (Mum) 218)] wherein, it has been held at para 11 thereof that the set off as proposed by the assessee cannot be denied, which is extracted hereunder: - 11. In the present appeal, the controversy is still narrower inasmuch as the short-term capital loss which was set-off by the assessee against the short term capital gain, has been accepted and the net figure of short-term capital gain after set-off of short term capital loss c .....

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dispute is relevant only for the first year of the operation of this provision and cannot crop up in the later years. Here we are concerned with the set-off of short term capital loss from one or more transactions with the short term capital gain from one or more transactions spread over the year, both before and after the cut-off date. Effectively the question is about the setting off of short-term capital loss and such set off is governed by subsection (2) of section 70, which has been reprod .....

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ort-term capital loss or short-term capital gain as the case may be, it is mandatory to determine short-term capital loss or short-term capital gain in respect of each of the 10 transactions. Then the employment, of the expression any other" capital asset in the later part of the sub-section for the purpose of set-off clearly indicates that the short-term capital loss from one transaction has to be considered disjointedly for set-off against the shortterm capital gain of any other transacti .....

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ect of any other capital asset. Prima-facie there is cue in the language of the sub-section that the option is with the assessee and he will decide as to whether the short-term capital loss from the f irst transaction ought to be set off against the shortterm capital gain of the transaction No. 2 or 3 or 4 etc, as the case may be. Our view about the vesting of the discretion in assessee for the purposes of set-off of short- term capital loss against any short-term capital gain is fortified when .....

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uffered in the post cut-off date against the short-term capital gain of the pre-cut-off date, it would have clearly set out such intention in the language of sub-section (2) itself, as has been done in sub-section(3.) In the absence of an stipulation in this regard in stub-section (2), we are satisfied that the choice has been left over to the assessee in taking decision about the setting off of short-term capital loss from one transaction against any other shortterm capital gain, whether within .....

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d prior to the amendment. 5.3.2 Following the aforesaid decision of the co-ordinate bench of this Tribunal in the case of First State Investments (Hong Kong)(supra), we hold that the set off as proposed by the assessee in the case on hand is to be allowed, and accordingly uphold the order of the Ld. CIT(A) in directing the Assessing Officer to permit the set off of the STCL (STT paid) against STCG (non STT paid). Consequently, ground no.1 of the revenue appeal is dismissed. 6. Ground No: 2 6.1 I .....

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