MORGAN STANLEY EMERGING MARKETS FUND INC, MUMBAI V. DDIT (IT) 4(1), MUMBAI

ITA 7891/MUM/2010

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 71187 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 10 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 01-04-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 15-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI BEFORE SHRI H L KARWA, PRESIDENT & SHRI N K BILLAIYA, ACCOUNTANT MEMBER ITA NOS.7891/MUM/2010 FOR ASST. YEAR: 2007-08 MORGAN STANLEY EMERGING MARKETS FUND INC., C/O. S R BATLIBOI & CO., 18 TH FLOOR, EXPRESS TOWERS, NARIMAN POINT, MUMBAI-21 PAN AAECM2939D VS. THE DDIT (IT) - 4(1) MUMBAI. (APPELLANT) (RESPONDENT) ITA NOS.7892/MUM/2010 FOR ASST. YEAR: 2007-08 MORGAN STANLEY INSTITUTIONAL FUND INC A/C., C/O. S R BATLIBOI & CO., 18 TH FLOOR, EXPRESS TOWERS, NARIMAN POINT, MUMBAI-21 PAN AAECM2940E VS. THE DDIT (IT) - 4(1) MUMBAI. (APPELLANT) (RESPONDENT) APPELLANTS BY : SHRI NIRAJ SHETH RESPONDENT BY : SHRI AARSI PRASAD DATE OF HEARING : 18.09.2013 DATE OF PRONOUNCEMENT :18.09.2013 O R D E R PER N.K.BILLAIYA (AM) : THESE TWO SEPARATE APPEALS BY TWO DIFFERENT ASSESSE ES ARE PREFERRED AGAINST THE ORDER OF THE DDIT (INTERNATIONAL TAXATION) - (4 )(1), PASSED U/S. 143(3) R.W.S. 2 ITA NO.7891 & 7892/M/10 AY:2007-08 144C(13) OF THE ACT PURSUANT TO THE DIRECTION RECEI VED FROM THE DISPUTE RESOLUTION PANEL -II, MUMBAI. 2. THE SHORT GRIEVANCE OF THE ASSESSEE IS THAT THE ASSESSING OFFICER ERRED IN DISALLOWING THE SET OFF OF SHORT TERM CAPITAL LOSS INCURRED ON ON MARKET TRANSACTIONS WHICH ARE SUBJECT TO SECURITIES TRANSACTION TAX FIR ST AGAINST THE SHORT TERM CAPITAL GAINS EARNED ON OFF MARKET TRANSACTIONS CHARGEABL E TO TAX @30% AND THEN THE BALANCE AGAINST SHORT TERM CAPITAL GAINS EARNED ON ON MARKET TRANSACTIONS CHARGEABLE TO TAX @10%. 3. AT THE VERY OUTSET, THE COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE STANDS DECIDED IN FAVOUR OF THE ASSESSEE BY THE SEV ERAL DECISIONS OF THE TRIBUNAL IN SIMILAR CASES. THE COUNSEL FILED COPIES OF THE DEC ISIONS OF THE TRIBUNAL. THE DR COULD NOT CONTROVERT THE SUBMISSIONS MADE BY THE CO UNSEL. 4. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE LOWE R AUTHORITIES VIS--VIS GRIEVANCES OF THE ASSESSEE. WE FIND FORCE IN THE S UBMISSIONS OF THE COUNSEL THAT THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY SEVERAL DECISIONS OF THE TRIBUNAL VIZ. I. HSBC GOLBAL INVESTMENT FUNDS BRIC MARKETS IN ITA NO .9034/M/2010 FOR A.Y. 2007-08. II. FIRST STATE INVESTMENTS (HONGKONG) LTD. 33 SOT 26 III. HSBC GLOBAL INVESTMENT FUNDS BRIC FREESTYLE IN ITA NO. 7769/MUM/2010 FOR A.Y. 2007-08 IV. AMERICAN CENTURY TWENTIETH CENTURY INTERNATIONAL DI SCOVERY FUND IN ITA NO.3602/MUM/2009 FOR A.Y. 2005-06. V. DWS INDIA EQUITY FUND IN ITA NO.5055/MUM/2010 FOR A. Y. 2007-08 VI. GOLDMAN SACHS FUNDS IN ITA NO.7846/MUM/2010 FOR A.Y . 2007-08 THE TRIBUNAL IN THE CASE OF HSBC GOLBAL INVESTMENT FUNDS BRIC MARKETS IN ITA NO.9034/M/2010, WHERE ONE OF US (AM) IS A PARTY TO THE SAID DECISION, AFTER CONSIDERING THE FACTS HAS DECIDED AS UNDER: 3 ITA NO.7891 & 7892/M/10 AY:2007-08 2. GROUND NO 1 TO 3 RELATE TO DENIAL OF THE ADJUST MENT OF SET OFF OF SHORT TERM CAPITAL LOSS SUFFERED BY THE HSBC GLOBAL INVES TMENT FUNDS. 3. THE DISPUTE RESOLUTION PANEL-I, WHO IS THE FIRST APPELLATE AUTHORITY (IN SHORT FAA)IN THIS APPEAL, HAS DECIDED THE ISSUE DEN YING SET OFF OF SHORT TERM CAPITAL LOSS AGAINST SHORT TERM CAPITAL GAINS. THE COUNSEL OF THE ASSESSEE STATED THAT THIS ISSUE IS COVERED BY THE DECISION O F THE TRIBUNAL IN THE CASE OF JCIT VS. MONTGOMERY EMERGING MARKETS FUNDS, REPORTE D IN 100 ITD 217 (MUM) (SP) 4. ON THE OTHER HAND, LEARNED DR PLACED RELIANCE ON THE ORDER OF THE FIRST APPELLATE AUTHORITY. 5. AFTER CONSIDERING THE ORDER OF THE FAA AND DECIS ION OF SPECIAL BENCH OF THE TRIBUNAL IN CASE OF MONTGOMERY EMERGING MARKETS FUND (SUPRA), WE DIRECT THE ASSESSING OFFICER TO ALLOW SET OFF OF SHORT TER M CAPITAL LOSS AGAINST SHORT TERM CAPITAL GAIN ARISING SALE OF ANY OTHER SHARE F OR THE SAME ASSESSMENT YEAR. THE SPECIAL BENCH HAS OBSERVED THAT, LOSS A RISING FROM ONE SOURCE CAN BE SET OFF AGAINST INCOME FROM ANY OTHER SOURCE UND ER SAME HEAD OF INCOME AND, THEREFORE, FOR RELEVANT ASSESSMENT YEARS SETTI NG-OFF OF SHORT-TERM CAPITAL GAINS AGAINST LONG-TERM CAPITAL LOSSES WAS PERMISSI BLE TO COMPUTE AMOUNT FOR TAXATION UNDER THE HEAD CAPITAL GAINS. 5.1 WE FURTHER NOTED THAT IN CASE OF M/S. HSBC GLOB AL EMERGING MARKETS EQUITY FUND, DECIDED IN ITA NO.5043/MUM/2010, VIDE ORDER DATED 23-9-2011, THE TRIBUNAL FOLLOWING THE DECISION IN THE CASE OF FIRST STATE INVESTMENTS (HONGKONG) LTD. VS. ADIT (IT), REPORTED IN 33 SOT 2 6 (MUM), WHEREIN THE ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE, ALLOWE D THE ISSUE IN FAVOUR OF THE ASSESSEE. SIMILAR VIEW HAS BEEN EXPRESSED IN CASE OF M/S. HSBC GLOBAL INVESTMENT FUNDS DECIDED IN ITA NO.7769/MUM/2010, V IDE ORDER DATED 1-8- 2012. FOLLOWING THESE ORDERS, WE ALLOW THE FIRST I SSUE IN FAVOUR OF THE ASSESSEE. HENCE, THE GROUNDS NO.1 TO 3 RAISED BY T HE ASSESSEE ARE DISPOSED OF ACCORDINGLY. 5. FACTS AND ISSUES BEING IDENTICAL, RESPECTFULLY F OLLOWING THE DECISION OF THE CO- ORDINATE BENCHES OF THE TRIBUNAL, BOTH THE APPEALS ARE ALLOWED IN FAVOUR OF THE ASSESSEE. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH SEPTEMBER 2013. SD/- SD/- (H L KARWA) (N.K.BILLAIYA ) PRESIDENT ACCOUNTANT MEMBER MUMBAI, DT : 18 TH SEPTEMBER, 2013 SA 4 ITA NO.7891 & 7892/M/10 AY:2007-08 COPY FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE C.I.T, MUMBAI 4. THE CIT (A)-CONCERNED, MUMBAI 5. THE DR, B- BENCH, ITAT, MUMBAI //TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI