TMI Blog2024 (4) TMI 834X X X X Extracts X X X X X X X X Extracts X X X X ..... our of the assessee. It is clearly held that under the provisions of section 70(2), STCL arising from any asset can be set off against STCG arising from any other asset under a similar computation made irrespective of different rate of tax. Therefore, the issue in appeal in the case of the assessee is squarely covered by the decision of the ITAT. Thus, we allow the appeal of the assessee. In the result, the appeal of the assessee is allowed. - Shri Amit Shukla, Judicial Member And Shri Amarjit Singh, Accountant Member For the Assessee : Ms. Hirali Desai, A.R., Shri Dhanesh Bafna, A.R. And Shri Nirmal Hardik, A.R. For the Revenue : Shri Anil Sant, D.R. ORDER PER : AMARJIT SINGH, ACCOUNTANT MEMBER: This appeal filed by the assessee is direc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CL of AY 2019-20 under section 111A read with section 115AD of the Act (taxable at 15%), against short-term capital gains ('STCG) under section 115AD of the Act (taxable at 30%). In doing so, the Ld. AO has erred in: a. holding that STCL of AY 2020-21 and brought forward STCL of AY 2019-20 covered under section 111A read with section 115AD of the Act (subject to tax rate of 15%) cannot be set-off against STCG of AY 2020-21 taxable under section 115AD of the Act (subject to tax rate of 30%). b. not appreciating the fact that section 70(2) and 74(1)(a) of the Act grants an unconditional right to set-off STCL against STCG regardless of differential tax rate. 5. On the facts and in the circumstances of the case and in law, the Ld. AO failed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act was issued on 29.06.2021. The assessee is a non resident entity registered with the Security Exchange Board of India (SEBI) as a Foreign Portfolio Investors (FPI) for carrying out investment activity in Indian capital markets. The assessee company was a tax resident in USA. During the course of assessment the Assessing Officer (AO) noticed that the assessee has disclosed its income as Long Term Capital Loss (LTCL) on which STT was paid of Rs. 1,30,58,60,860/- and also claimed Short Term Capital Loss (STT paid) of Rs. 25,49,24,728/-, Short Term Capital Gain (STCG) of Rs. 27,64,65,202/- on sale of derivatives and physical settlement of derivatives, dividend income of Rs. 2,28,73,297/- claimed as exempt under section 10(34) of the Act an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion Panel (DRP) and the DRP vide order under section 144C(5) of the Act dated 28.06.2023 dismissed the objections filed by the assessee holding that STCG/STCL on derivative transactions were on a different footing than STCG/STCL on equity shares. Thereafter the AO passed the final assessment order under section 143(3) read with section 144C(13) on 26.07.2023 on the direction of the DRP after determining the tax liability without setting off of STCG loss taxable at the rate of 15% against the STCG on sale of derivatives taxable at the rate of 30% under section 70(2) of the Act. 5. During the course of appellate proceedings before us the Ld. Counsel submitted that the setting off of STCL taxable at the rate of 15% under section 115AD of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re the claim of set off was disallowed. The assessee claimed that mere difference in rate of taxation cannot be taken as the reason for disallowance of set off as both the STCG under the category of similar computation. In this regard, we have perused the various judicial pronouncements referred by the Ld. Counsel as mentioned above. We find that in the decision of GSB Capital Markets Ltd. (supra) the co-ordinate Bench of the Tribunal, Mumbai held that loss arisen from transfer of short term capital assets which are brought forward from earlier years can be set off against the capital gain assessable for subsequent assessment year in respect of any other capital asset which could be either LTCG or STCG. Further, we have perused the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in the period before cut off date should be set off against STCG of that period and remaining amount be taxed @ 30%. The Tribunal held that (i) in view of provision of section 70(2), the assessee had a choice in taking decision about setting off of STCL from one transaction against any other STCG, whether within or outside the cut off date i.e. 30.09.2004 and (ii) the assessee was justified in setting off STCL of later period against STCG of former period to the extent of excess STCG over STCL upto cut off date i.e. 30.09.2004. The above order has been followed by the Co-ordinate Bench in Fidelity Investment Trust Fidelity Overseas Fund (supra) and DWS India Equity Ltd. (supra). The decision in DWS India Equity Ltd. has been followed in C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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