GOLD MAN SCCHS FUNDS- GOLDMAN SCHS BRICS PORTFOLIO, MUMBAI V. ADIT (IT) 3(1), MUMBAI

ITA 7846/MUM/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8461 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-10-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 23-10-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 12-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRAVIN VARMA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES G , MUMBAI BEFORE SHRI I. P. BANSAL, JUDICIAL MEMBER AND SHRI RAJENDRA SINGH, ACCOUNTANT MEMBER ITA NO. : 7846/MUM/2010 ASSESSMENT YEAR : 2007-08 M/S. GOLDMAN SACHS FUNDS GOLDMAN SACHS BRICS PORTFOLIO C/O. S.R. BATLIBOI & CO. 18 TH FLOOR, EXPRESS TOWERS, NARIMAN POINT, MUMBAI-400 021 PAN NO: AAACCG 6619 C VS. ASSISTANT DIRECTOR OF INCOME - TAX (INTERNATIONAL TAXATION)- 3(1), SCINDIA HOUSE, N.M. MARG, MUMBAI-400 038 (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI NISHANT THAKKAR RESPONDENT BY : SHRI P RAVIN VARMA DATE OF HEARING : 2 3 .10.2012 DATE OF PRONOUNCEMENT : 23.10.2012 ORDER PER RAJENDRA SINGH, A.M. : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE A.O. PASSED U/S.143(3) / 144C(13) AS PER THE DIRECT ION OF DRP FOR THE A.Y. 2007-08. THE ONLY DISPUTE RAISED IN THIS APPE AL IS THAT THE A.O. WAS NOT JUSTIFIED IN DISALLOWING THE SET OFF OF SHORT T ERM CAPITAL LOSS INCURRED ON ON MARKET TRANSACTIONS AGAINST THE SHORT TERM CAPITAL GAIN EARNED ON OFF MARKET TRANSACTIONS. 2. THE FACTS IN BRIEF ARE THAT THE ASSESSEE HAD INC URRED SHORT TERM CAPITAL LOSS OF `. 14,81,28,197/- FROM ON MARKET TRANSACTIONS ON WHI CH ITA NO : 7846/MUM/2010 M/S. GOLDMAN SACHS FUNDS GOLDMAN SACHS BRICS PORTFOLIO 2 SECURITY TRANSACTIONS TAX (STT) WAS LEVIABLE. THE ASSESSEE HAD ALSO SHOWN SHORT TERM CAPITAL GAIN OF `. 3,34,49,508/- FROM OFF MARKET TRANSACTIONS WHICH WERE NOT SUBJECTED TO SECURITY TRANSACTION TAX. THE ASSESSEE HAD SET OFF THE LOSS AGAINST THE GAIN MENT IONED ABOVE. THE A.O. HOWEVER, DID NOT ALLOW THE CLAIM ON THE GROUND THAT THE GAIN WAS FROM NON STT TRANSACTIONS ON WHICH TAX WAS PAYABLE AT 30 % WHICH, THEREFORE, COULD NOT BE ADJUSTED AGAINST LOSS FROM STT BASED T RANSACTIONS ON WHICH TAX PAID WAS ONLY 10%. AGGRIEVED BY THE SAID DECISI ON, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 3. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE RECO RDS AND CONSIDERED THE MATTER CAREFULLY. IT HAS BEEN BROU GHT TO OUR NOTICE BY THE LEARNED AR FOR THE ASSESSEE THAT THE SAME ISSUE HAD BEEN CONSIDERED AND DECIDED BY THE TRIBUNAL IN CASE OF M/S. DWS IND IA EQUITY FUND IN ITA NO.5055/MUM/2010. IN THAT CASE ALSO THE ASSESS EE HAD SET OFF SHORT TERM CAPITAL LOSS ARISING FROM STT PAID SHARE TRANSACTIONS AGAINST SHORT TERM CAPITAL GAIN ARISING FROM NON ST T TRANSACTIONS. THE TRIBUNAL NOTED THAT UNDER THE PROVISIONS OF SECTION 70(2), SHORT TERM CAPITAL LOSS ARISING FROM ANY ASSET CAN BE SET OFF AGAINST SHORT TERM CAPITAL GAIN ARISING FROM ANY OTHER ASSET UNDER A S IMILAR COMPUTATION MADE. THE AO HELD THAT SINCE GAIN WAS FROM SHARES O N WHICH NO STT WAS PAID AND LOSS FROM STT PAID TRANSACTIONS, THESE FEL L IN DIFFERENT CATEGORIES AND COULD NOT BE SET OFF AGAINST EACH OT HER. THE TRIBUNAL NOTED THAT THIS ASPECT HAD ALREADY BEEN EXAMINED BY THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF FIRST STATE INVESTME NTS (HONG KONG) LTD. VS. ADIT, IN WHICH IT HAS BEEN HELD THAT THE PHRASE UNDER SIMILAR COMPUTATION MADE REFERS TO COMPUTATION OF INCOME, THE PROVISIONS FOR WHICH ARE CONTAINED UNDER SECTIONS 45 TO 55A OF THE ACT. THE TRIBUNAL ALSO HELD THAT THE MATTER OF COMPUTATION OF INCOME WAS A SUBJECT WHICH ITA NO : 7846/MUM/2010 M/S. GOLDMAN SACHS FUNDS GOLDMAN SACHS BRICS PORTFOLIO 3 CAME ANTERIOR TO THE APPLICATION OF RATE OF TAX WHI CH ARE CONTAINED IN SECTION 110 TO 115BBC. THEREFORE, MERELY BECAUSE T HE TWO SET OF TRANSACTIONS ARE LIABLE FOR DIFFERENT RATE OF TAX, IT CAN NOT BE SAID THAT INCOME FROM THESE TRANSACTIONS DOES NOT ARISE FROM SIMILAR COMPUTATION MADE AS COMPUTATION IN BOTH THE CASES HAS TO BE MAD E IN SIMILAR MANNER UNDER THE SAME PROVISIONS. THE TRIBUNAL THE REFORE, HELD THAT SHORT TERM CAPITAL LOSS ARISING FROM STT PAID TRANS ACTIONS CAN BE SET OFF AGAINST SHORT TERM CAPITAL GAIN ARISING FROM NON ST T TRANSACTIONS. THE CASE OF THE ASSESSEE IS IDENTICAL. THEREFORE, RESPE CTFULLY FOLLOWING THE DECISION OF THE TRIBUNAL, WE SET ASIDE THE ORDER OF THE A.O. ON THIS ISSUE AND ALLOW THE CLAIM OF THE ASSESSEE. 4. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD OCTOBER, 2012. SD/ - SD/ - ( I. P. BANSAL ) ( RAJENDRA SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DT: 23.10.2012 COPY FORWARDED TO : 1. THE APPELLANT, 2. THE RESPONDENT, 3. THE C.I.T. 4. CIT (A) 5. THE DR, - BENCH, ITAT, MUMBAI //TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI ROSHANI