SCHWAB FUNDAMENTAL EMERGING MARKETS EQUITY ETY ,MUMBAI V. DEPUTY COMMISSIONER OF INCOME TAX (INTERNATIONAL TAXATION)-4(2)(1), MUMBAI

ITA 2133/MUM/2025

AI Insights

The case involves Schwab Fundamental Emerging Markets Equity ETF, a trust organized in the USA and registered as a Foreign Portfolio Investor in India, appealing against the final assessment orders for the Assessment Year 2022-2023. The primary contention was regarding the rejection of the manner in which the Assessee set off its short-term capital losses against gains, particularly the treatment of gains and losses from transactions subject to Securities Transaction Tax (STT) and those not subject to STT. The Assessing Officer and the Dispute Resolution Panel (DRP) had recomputed the assessable capital gains, which the Assessee contested. The Tribunal examined precedents and the provisions of the Income Tax Act, particularly focusing on the interpretation of Section 70(2) concerning the set-off of losses and gains.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 652651 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: I
• Assessment Year: 2022-2023
• Other Referred Cases: Commissioner of Income Tax, Kol-II Vs. Rungamatee Trexim Pvt. Ltd., Vanguard Total International Stock Index Fund, Goldman Sachs Fund, DWS India Equity Fund, JS Capital LLC, East Bridge Capital Master Fund I Ltd., M/s. T. Rowe Price International Discovery Fund, Emerging Market Equity Index Master Fund A Series of VISPLC and Others, Vanguard Emerging Markets Stock Index Fund A Series of VISPLC and Other, Teacher Retirement System of Texas
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: ASSESSEE
• Keywords: Question of law; Capital Gains; Initiation of penalty proceedings
• Section: 143(3)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “I” BENCH, MUMBAI SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER SHRI OMKARESHWAR CHIDARA, ACCOUNTANT MEMBER ITA No.2133/MUM/2025 (Assessment Year: 2022-2023) Schwab Fundamental Emerging Markets Equity ETF C/o. Ernst & Young LLP, 14th Floor, The Ruby, 29, Senapati Bapat Marg, Dadar (West), Mumbai-400028, Maharashtra. [PAN:AAOTS7926B] …………. Appellant Deputy/Assistant Commissioner of Income Tax (International Tax) 2(3)(1), Mumbai Kautilya Bhavan, G Block, Bandra Kurla Complex, Mumbai - 400051, Maharashtra. Vs …………. Respondent Appearance For the Appellant/Assessee For the Respondent/Department : : Shri Pranay Gandhi; Shri Lekh Mehta Shri Krishna Kumar Date Conclusion of hearing Pronouncement of order : : 10.06.2025 17.06.2025 O R D E R [ Per Rahul Chaudhary, Judicial Member: 1. The present appeal pertaining to Assessment Year 2022-2023 has been preferred by the Assessee challenging Final Assessment Orders, dated 10/01/2025, passed by the Assessing Officer under Section 143(3) read with Section 144C(13) of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’], as per the directions issued by Commissioner of Income Tax [Dispute Resolution Panel (2)], Mumbai-1 [for short ‘DRP’], on 05/12/2024 under Section 144C(5) of the Act. 2. The Assessee has raised the following grounds of appeal: ITA No.2133/Mum/2025 Assessment Year 2022-2023 2 “ASSESSMENT YEAR ('AY'): 2022-23 GROUNDS OF APPEAL Based on the facts and circumstances of the case and in law, the Appellant craves leave to prefer an appeal against the order dated 10 January 2025, issued by the Deputy Commissioner of income-tax (International Tax)-4(2)(1), Mumbai (hereinafter referred to as 'the learned DCIT'], under section 143(3) read with section 144C(13) of the income-tax Act, 1961 (Act), in pursuance of the directions under section 144C(5) of the Act issued by the Hon'ble Dispute Resolution Panel-II, Mumbai (DRP-II) dated 5 December 2024 on the following grounds, each of which is without prejudice to and independent of the others: Ground of Appeal No. 1: The learned DCIT erred in rejecting the manner in which the Appellant set off its short-term capital losses 1. The learned DCIT erred in not allowing the manner of set-off of short-term capital losses as adopted by the Appellant, i.e., set- off of short-term capital loss (incurred during the year and brought forward from earlier years) in respect of sale of shares subjected to Securities Transaction Tax (STT) first against short-term capital gains earned on the sale of shares not subject to STT, and thereby taxing gross short-term capital gains in respect of the sale of shares not chargeable to STT, earned by the Appellant. 2. The learned DCIT failed to appreciate that income under the head 'Capital gains' is determined as per sections 45 to 55A of the Act whilst sections 111A and 115AD only provide for determination of tax in certain cases and therefore, gains arising on transactions subjected to STT and those not subjected to STT are no different and satisfy the 'similar computation' condition specified in section 70(2) of the Act. 3. The learned DCIT failed to appreciate that section 70 of the Act does not provide any hierarchy for set-off of losses, the short- term capital loss arising from sale of shares subjected to STT can be first set-off against the short-term capital gains arising from sale of securities not subjected to STT instead of short- term capital gains arising from sale of shares subjected to STT. 4. The learned DCIT erred in not following the binding decisions of the jurisdictional Tribunal and rejecting the set-off merely because the Department has preferred an appeal before the jurisdictional High Court against one of the orders of the jurisdictional Tribunal. Ground of Appeal No. 2: Initiating penalty proceedings under section 270A of the Act. 5. The learned DCIT erred in initiating penalty under section 270A ITA No.2133/Mum/2025 Assessment Year 2022-2023 3 of the Act alleging under reporting of income by the Appellant.” Ground No.1 to 4: 3. The relevant facts in brief are that the Assessee, a trust organized in the United States of America, is registered with the Securities and Exchange Board of India (SEBI) as a Foreign Portfolio Investor. For the Assessment Year 2022-2023, the Assessee filed return of income on 25/07/2022 declaring total income of INR.6,56,02,95,980/-. In the return of income the Assessee offered to tax the net Short Term Capital Gains (STCG) of INR.7,60,92,324/- [taxable at 15% under Section 111A of the Act] computed in the following manner: Particulars Amount (In INR.) Short-Term Capital Gains [attributable to shares which are subject to STT and taxable as per section 115AD read with Section 111A of the Act at the rate of 15%] 7,18,24,822 Add Short-Term Capital Gains [attributable to shares and securities which are not subject to STT and taxable as per section 115AD of the Act at the rate of 30%] 1,92,80,432 Less. Short-Term Capital Loss [attributable to shares which are subject to STT] (74,75,032) Net Short-Term Capital Gains 8,36,30,222 Less. Brought forward Short-Term Capital Losses [attributable to shares which are subject to STT] (75,37,898) Net Short-Term Capital Gains Chargeable to Tax 7,60,92,324 4. In computing the Net Short Term Capital Gains of INR.7,60,92,324/, the Assessee has adopted a method of set-off of Short-Term Capital Loss (from share transaction subject to STT) amounting to INR.75,37,898/- against the Short-Term Capital Gains (non-STT paid taxable at the rate of 30%) amounting to INR.1,92,80,432/- and thereafter, the Assessee has set-off of the balance gains of INR.,1,18,05,400/-. [INR.1,92,80,432/- minus INR.74,75,032/-] against short-term capital loss brought forward of INR.75,37,898/-. Thus, the Assessee had offered to tax Short Term Capital Gain (Non-STT Paid) amounting to INR.42,67,502/- [INR.1,18,05,400/- minus ITA No.2133/Mum/2025 Assessment Year 2022-2023 4 INR.75,37,898/-] at the rate of 30% and Short Term Capital Gains (STT Paid) amounting to INR.7,18,24,822/- at the rate of 15% and. 5. However, the Assessing Officer and DRP did not accept the Assessee’s treatment and recomputed the assessable capital gains. In the final Assessment Order, dated 10/01/2025, the Assessing Officer concluded as under: “12. Conclusion It is well settled that when there are two provisions in an enactment which cannot be reconciled with each other, the doctrine of harmonious construction should be applied and attempt should be so interpret the provisions, if possible, giving effect to both. It is the duty of the courts to avoid \"a head on clash between two sections of the same Act and, \"whenever it is possible to do so, to construe provisions which appear to conflict so that they harmonise.\" It should not be lightly assumed that \"Parliament had given with one hand what it took away with the other. The provisions of one section of a statute cannot be used to defeat those of another \"unless it is impossible to effect reconciliation between them\". An analysis of the frame work of the Income Tax Act clearly suggests that applicability of tax rate is subsequent to determination of total income, Sec. 111A, 112A, 115A, 115BBE are all contained in Chapter XII Determination of Tax in certain special cases and is an extension of tax rate applicable, modifying the same. Therefore, in the process of determination of income chargeable under the head \"Capital Gains\" and consequently determination of total income, the applicability of the relevant tax rates has to be brought into play. Proviso' is used to remove the special cases of the general enactment and give them special recognition. It needs no elaboration to hold that Section 115AD, being a special provision for Flls, overrides the general provisions. That means that the fact of a particular capital gain being chargeable to preferential tax treatment depending on the nature of income as per various sections of the 1.T Act has to be considered as per the Doctrine of Harmonious Construction. The same position is applicable to set off of intra head loss as also set off of unabsorbed loss. Therefore, whether a part STCL has arisen from STT transaction or non STT transaction is a material fact in computation of total income. The correct way of computation of STCG is to be aggregate all incomes or losses under the STCG as per the tax prescribed and then find the net capital gain chargeable to tax. It goes without saying, in the absence of any exclusive provision of which loss has to be set off against which income, the method that renders a harmonious construction of the various sections will have to be followed. ITA No.2133/Mum/2025 Assessment Year 2022-2023 5 Further, it is seen that the substantial question of law \"Whether short term capital loss from a STT paid transaction can be set off against short term capital gains arising from non STT paid transaction in terms of section 70(2) of the Income tax Act?\" has been admitted by the Hon'ble Bombay High Court in the case of Goldman Sachs Fund-ITXA/1554/2013 and DWS India Equity Fund-ITXA/633/2013. In view of the above discussion, the assessee manner of setting off its STCG taxable @30% against STCL taxable @15% is not allowed as the same is done to reduce the STCG to be taxed at 30%. Penalty proceedings u/s 270A of the Act are initiated separately for all the issues of addition discussed above for under-reporting of income. 13. Assessee filed objection against the aforesaid Draft Assessment Order dated 23.03.2024 before Hon'ble DRP-2, Mumbai. The Hon'ble DRP-2, Mumbai, vide its order dated05.12.2024, dismissed the objections raised by the assessee against draft order dated 23.03.2024. The operative part of the direction of Hon'ble DRP-2, Mumbai is reproduced as under: \"The core issue pertains to rejection of manner of set-off of Short-Term Capital Losses(STCL) adopted by the Applicant Assessee. The applicant has adopted a method of set-off of short-term capital loss from share transaction subject to Securities Transaction Tax (STT) and taxable at rate of 15%, against short-term capital gains earned on the transaction of sale of shares not subject to Securities Transaction Tax (STT) and therefore, taxable at 30% rate; and thereafter, set-off of the balance loss against short-term capital gains earned on the transactions of sale of shares subject to STT. The applicant has averred that section 70 is the instrumental provision for allowability of intra-head set off of Capital gains and differential rates of taxation as per section 111A do not impact the operation of sub-section 70(2) of the Income Tax Act, 1961. .....5.3.3. Directions of the Panel: As the issues raised in above grounds of objection is pending for decision by higher judicial forum, based on discussion made by us; we are constrained not to accept the grounds of objections raised by the Applicant. Accordingly, the final assessment order u/s 143(3) r.w.s 144C(13) is being passed in conformity with the directions issued by the Hon'ble DRP. 14. After examining the records available, total income of the assessee is assessed as under: ITA No.2133/Mum/2025 Assessment Year 2022-2023 6 Short-Term Capital Gains (non STT paid) 1,92,80,432 Taxable at 30% (Non-STT paid) Short-Term Capital Gains (STT paid) 7,18,24,822 Short-Term Capital Loss (STT paid) 74,75,032 Short-Term Capital Gains (STT paid) (b/f) 75,37,898 Net Short-Term Capital Gains 5,68,11,892 Taxable @ 15% Long Term Capital Gain 5,24,02,19,366 Taxable @ 10% Income from Other sources (Dividend income) 1,24,38,93,370 Taxable @ 20% Income from Other sources (interest from company) 1,90,920 Taxable @ 30% Total Taxable income 6,56,03,95,980 15. Assessed under section 143(3) rw.s. 144C(13) of the Income Tax Act, 1961. Give due credit for prepaid taxes, if any, after proper verification. Charge interest u/s. 234A for late filing of return of income interest u/s. 2348 and u/s. 234C of the Income Tax Act, 1961 for default in payment of advance tax, if and as due. Issue demand notice and challan, in regards to dues as per enclosed IT.NS. 150. Penalty proceedings u/s 270A of the Act are initiated separately for all the issues of addition discussed above for underreporting of income.” (Emphasis Supplied) Thus, the Assessing Officer held that STCG (Non STT Paid) amounting to INR.1,92,80,432/- was taxable at the rate of 30% under Section 115AD of the Act and the STCG (STT Paid) of INR.5,68,11,892/- [after setting off brought forward Short Term Capital Loss of INR.75,37,898/- pertaining to STT Paid transactions] was taxable at the rate of 15% as per Section 115AD read with Section 111A of the Act. Thus, the Assessing Officer recomputed assessable Short Term Capital Gains as under: Short-term capital gains/ (loss) Taxable at 15% (STT paid) Taxable at 30% (Non-STT paid) Short-Term Capital Gains 7,18,24,822 1,92,80,432 Less Current year’s Short Term Capital Losses (STT) (74,75,032) Nil Less: Brought forward Short Term Capital Losses (STT) (75,37,898) Nil Net taxable Short-Term Capital Gains 5,68,11,892 1,92,80,432 6. Being aggrieved, the Assessee has preferred the present appeal ITA No.2133/Mum/2025 Assessment Year 2022-2023 7 before the Tribunal on the grounds reproduced in paragraph 2 above. 7. We have considered the rival submissions and have perused the material on record. 8. The solitary issue that arise for consideration is whether Short Term Capital Loss from STT paid transactions (taxable at the rate of 15%) can be set off against Short Term Capital Gains arising from Non- STT paid transactions (taxable at the rate of 30%) prior to setting off the available Short Term Capital Gains arising from STT paid transactions (taxable at the rate of 15%). 9. We find that identical issue had come up for consideration before the Hon’ble High Court at Culcutta in the case of Commissioner of Income Tax, Kol-II Vs. Rungamatee Trexim Pvt. Ltd. [2008] [ITA No.812 of 2008], dated 19/12/2008. The Hon’ble Culcutta High Court decided the issue in the favour of the Assessee holding as under: “In Ground Nos.5 and 6 the assessee has objected to the mode of set off adopted by the Assessing Officer in assessing income from short term capital cases. During the year under consideration the assessee earned short term capital gain of Rs.7,29,584/- in transaction in shares where security transaction tax was not paid and income was subject to tax at normal rate. The assessee also earned short term capital gain of Rs.2,27,564/ in transaction in shares where security transaction tax was paid and income was eligible for concessional rate of tax under section 111A. The assessee also suffered short term capital loss of Rs.7.17,660/- in transactions in shares involving payment of security transaction tax. In the impugned order the A.O. computed the capital gain in the following manner without discussing any reasons for adopting such mode of computation. Calculation of income/loss from capital gain Short term capital loss with STT (-)7.17,660/- Short term capital gain with STT 2,27,564/- Net Short Term capital loss with STT (-) 4,90,096/- ITA No.2133/Mum/2025 Assessment Year 2022-2023 8 Short term capital gain without STT 7,29,584/- Net Short term capital gain 2,39,488/- Less Brokerage 5,914/- Taxable short term capital gain of normal rate 2,33,574/- Long term capital gain at 10% rate (as per computation) 1,49,431/- I have perused the assessment order and have considered submissions of the A/R. In the impugned order the A.O. has not given any reasons for first sitting off short term capital gain with STT against short term capital STT and then allow of set off of remaining loss of Rs.4,90,096/ against short term capital gain without STT. The mode of set off adopted by the A.O. shown that be accepted in principle that short term capital loss with STT can be legally set oft against short term capital gain without STT. According to the assessee, the chronology for the set off by the A.0. was contrary to chronology adopted by the assessee, only because the assessee's mode resulted in concessional rate of the tax being applied to higher amount of short term capital gain which resulted more tax benefit to an assessee. On perusal of the provision of section 70, I find that there is no prohibition nor the Act compels the assessee to first set off short term capital gain with STT against short term capital loss with STT and then allows set off against short term capital gain without STT. In absence of any specific mode of set off provided in the Act and in absence of any prohibition and in absence of any specific chronology for set off prescribed in the Act, the assessee was entitled to exercise his option with regard to the chronology of set off which was most beneficial to the assessee. It is settled proposition of law that when a provision of the Act gives option to the assessee, such option should be exercised which will favour the assessee and not the revenue. The A/R for the assessee was well justified in relying on the decision of the Calcutta High Court and the Circular of the Board dated 7.7.1955 since the principles laid down therein appeared to be fully applicable. The Commissioner of Income Tax (Appeals) therefore came to the conclusion in favour of the assessee. He further came to the conclusion that the disallowance has been made on presumption. In these circumstances, the order passed by the Commissioner of Income Tax and subsequent thereto, the Commissioner of Income Tax (Appeals) had already considered the case of the department and upheld the order passed by it. We have carefully considered the said question and in our considered opinion, there is no illegality or irregularity in respect of the order so passed by the learned Tribunal. We, accordingly, find that there is no reason to interfere with the ITA No.2133/Mum/2025 Assessment Year 2022-2023 9 order so passed by the learned Tribunal and further the order so passed by the learned Tribunal does not suffer from any illegality or irregularity and we find that no substantial question of law is involved in this appeal. Hence, we dismiss the appeal. All parties concerned are to act on a xerox signed copy of the minutes of this order on the usual undertakings. Urgent Xerox certified copy of this, if applied for, be supplied to the parties subject to compliance with all requisite formalities.” (Emphasis Supplied) 10. The above judgment was followed by the Co-ordinate Bench of the Mumbai Tribunal in the case of Vanguard Total International Stock Index Fund1 wherein it was held as under: “3. At the very outset, the ld. Counsel for the assessee argued the appeal on the issues raised vide Ground No.5. 4. Representatives of both the sides were heard at length. Case records carefully perused and the relevant documentary evidence brought on record duly considered. 5. During the year under consideration, the assessee earned short term capital gain, interest on IT refund, dividend return from Indian companies and interest from REUIT/INVIT Units. The assessee filed its return of income on 12/03/2022 declaring total income at Rs.11,40,04,39,930/-. The assessee is a trust organized in U.S.A. and is registered with the Securities & Exchange Board of India (SEBI) as a Foreign Portfolio Investor. The entire quarrel revolves around the following short term capital gains/losses: STCG (non STT) 742,238,907 STCL (current STT) (616,271,201) STCL (bf) STT (223,701,502) Balance STCL (STT) (9,77,33,796) STCG (STT) 174,64,01,537 Net STCG (STT) 164,86,67,741 5.1. The underlying facts show that the assessee had short term capital gains on STT paid shares, short term capital loss on STT paid shares and also short term capital gains on non-STT paid shares and short term capital losses on non-STT paid shares. 6. From the chart exhibited hereinabove, it can be seen that the assessee has first set off STT losses against 1 ITA No.4656/Mum/2023 (Assessment Year 2021-2022), dated 13/12/2024 ITA No.2133/Mum/2025 Assessment Year 2022-2023 10 non-STT gains within the remaining STT losses is set off against the STT gains. By this the assessee has exhausted all the losses (current and brought-forward) both the STT paid and non-STT paid against short term capital gains (non STT) to arrive at net short term capital gains (non STT) at Rs.8,79,11,797/- and the short term capital gain (STT paid) was kept without any set off at the same figure of Rs.6,35,68,115/-. 6.1. xx xx 7. xx xx 8. xx xx 9. We have given a thoughtful consideration to the orders of the authorities below. It is true that different rates of taxes have been provided u/s.115AD and 111A of the Act in respect of gain on non-STT paid shares and STT paid shares but it is also a fact that u/s.70 of the Act, no chronology has been mentioned in respect of set off of losses nor there is any provision in the Act that losses of non-STT paid shares cannot be set off against the gains on STT paid shares. The decision of the Hon'ble High Court of Calcutta, is on this issue in ITA No. 812 of 2008. judgment dated 19/12/2008, wherein the Hon'ble High Court held as under- \"In Ground Nos.5 and 6 …………. xx xx On perusal of the provision of section 70. I find that there is no prohibition nor the Act compels the assessee to first set off short term capital gain with STT against short term capital loss with STT and then allows set off against short term capital gain without STT, In absence of any specific mode of set off provided in the Act and in absence of any prohibition and in absence of any specific chronology for set off prescribed in the Act, the assessee was entitled to exercise his option with regard to the chronology of set off which was most beneficial to the assessee. It is settled proposition of law that when a provision of the Act gives option to the assessee, such option should be exercised which will favour the assessee and not the revenue. The A/R for the assessee was well justified in relying on the decision of the Calcutta High Court and the Circular of the Board dated 7.7.1955 since the principles laid down therein appeared to be fully applicable.\" The Commissioner of Income Tax (Appeals) therefore ITA No.2133/Mum/2025 Assessment Year 2022-2023 11 came to the conclusion in favour of the assessee. He further came to the conclusion that the disallowance has been made on presumption. In these circumstances, the order passed by the Commissioner of Income Tax and subsequent thereto, the Commissioner of Income Tax (Appeals) had already considered the case of the department and upheld the order passed by it. We have carefully considered the said question and in our considered opinion, there is no illegality or irregularity in respect of the order so passed by the learned Tribunal We, accordingly, find that there is no reason to interfere with the order so passed by the learned Tribunal and further the order so passed by the learned Tribunal does not suffer from any illegality or irregularity and we find that no substantial question of late is involved in this appeal. Hence, we dismiss the appeal.” 10. This view has been followed by the Co-ordinate Benches in JS Capital LLC in ITA No. 3396/Mum/2023, East Bridge capital Master Fund I Ltd. in ITA No. 2976/Mum/2023, DWS India Equity Fund in ITA No. 5055/Mum/2010, M/s. T. Rowe Price International Discovery Fund in ITA No. 7627/Mum/2011. 11. Considering the facts of the case in totality, in light of the decisions of the Hon'ble Calcutta High Court (supra), we do not find any merits in the computation done by the AO. We accordingly direct the AO to accept the computation of the assessee. Ground No. 5 is allowed.” (Emphasis Supplied) 11. On perusal of the above judicial precedents, it can be seen that it has been held that under Section 70 of the Act no chronology has been mentioned in respect of set off of losses. The provisions contained in the Act do not compel an assessee to first set off Short Term Capital Gain arising from STT paid transactions against Short Term Capital Loss from STT paid transaction and then allows set off against short term capital gain without STT paid transaction. In absence of any specific chronology for set off prescribed in the Act, the assessee was entitled to exercise his option with regard to the chronology/hierarchy of set off current year and brought forward Short Term Capital Losses which was most beneficial to the Assessee. Further, during the course of hearing the Assessee had also relied upon the various decisions of the Mumbai Tribunal in the ITA No.2133/Mum/2025 Assessment Year 2022-2023 12 case of where identical views has been taken by the Co-ordinate Bench of the Tribunal: (a) iShares Edge MSCI EM Minimum Volatility UCITS ETF and others [ITA No.4562/Mum/2023, ITA No.4563/Mum/2023, ITA No.4565/Mum/2023, ITA No.4566/Mum/2023, ITA No.4599/Mum/2023, dated 29/05/2024], (b) iShares MSCI EM UNCITS ETF USD ACC and others [ITA No.4564/Mum/2023, ITA No.4567/Mum/2023, ITA No.4570/Mum/2023, 31/05/2024], (c) Emerging Market Index Non-Lendable Fund [ITA No.4589/Mum/2023, dated 05/08/2024], (d) JS Capital LLC [ITA No.3396/Mum/2023, dated 26/02/2024], (e) India Acorn Fund Ltd. [ITA No.4556/Mum/2023, dated 29/05/2024], (f) JP Trust [ITA No.6379/Mum/2024, dated 20/01/2025, (g) Fidelity Asian Value PLC [ITA No.4748/Mum/2023, dated 17/01/2025], (h) Emerging Market Equity Index Master Fund A Series of VISPLC and Others [ITA No.4588/Mum/2023 and ITA No.4594/Mum/2023, dated 30/08/2024], (i) Vanguard Emerging Markets Stock Index Fund A Series of VISPLC and Other [ITA No.1277/Mum/2025, ITA No.1278/Mum/2025, ITA No.1279/Mum/2025, ITA No.1280/Mum/2025, ITA No.1281/Mum/2025, ITA No.1282/Mum/2025, ITA No.1283/Mum/2025, dated 23/05/2025]. (j) Teacher Retirement System of Texas [ITA No.1371/Mum/2025, dated 23/05/2025] 12. On the other hand, we note that the Revenue had failed to bring on record any judicial precedents wherein a contrary view has been taken. Further, we note that in Paragraph 12 of the Final Assessment Order, the Assessing Officer has itself recorded as under: “Further, it is seen that the substantial question of law \"Whether short term capital loss from a STT paid transaction can be set off against short term capital gains arising from non STT paid transaction ITA No.2133/Mum/2025 Assessment Year 2022-2023 13 in terms of section 70(2) of the Income tax Act?\" has been admitted by the Hon'ble Bombay High Court in the case of Goldman Sachs Fund-ITXA/1554/2013 and DWS India Equity Fund-ITXA/633/2013”. Thus, admittedly, identical issue is pending adjudication before Hon’ble Bombay High Court in appeals preferred by the Revenue against the decisions of the Co-ordinate Benches of Tribunal in the case of Goldman Sachs Fund [ITXA/1554/2013] and DWS India Equity Fund [ITXA/633/2013]. 13. Therefore, in view of the above and respectfully following the above judicial precedents cited on behalf of the Assessee, we direct the Assessing Officer to accept the Net Short Term Capital Gains as offered to tax by the Assessee in the return of income. Further, the Assessing Officer is also directed to grant the benefit of set off of brought forward Short Term Capital Loss of INR.75,37,898/- as claimed by the Assessee. In terms of aforesaid, Ground No.1 to 4 raised by the Assessee are allowed. Ground No.5: 14. Ground No.5 raised by the Assessee pertains to initiation of penalty proceedings under Section 270A of the Act and the same is dismissed as being premature in nature. 15. In result, appeal preferred by the Assessee is partly allowed. Order pronounced on 17.06.2025. Sd/- Sd/- (Omkareshwar Chidara) Accountant Member (Rahul Chaudhary) Judicial Member म ुंबई Mumbai; दिन ुंक Dated : 17.06.2025 Milan,LDC ITA No.2133/Mum/2025 Assessment Year 2022-2023 14 आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : 1. अपील र्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आय क्त/ The CIT 4. प्रध न आयकर आय क्त / Pr.CIT 5. दिभ गीय प्रदिदनदध ,आयकर अपीलीय अदधकरण ,म ुंबई / DR, ITAT, Mumbai 6. ग र्ड फ ईल / Guard file. आिेश न स र/ BY ORDER, सत्य दपि प्रदि //True Copy// उप/सह यक पुंजीक र /(Dy./Asstt. Registrar) आयकर अपीलीय अदधकरण, म ुंबई / ITAT, Mumbai "