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TMI Blog2024 (4) TMI 834X X X X Extracts X X X X X X X X Extracts X X X X ..... s and in the circumstances of the case and in law, the [final assessment] order [dated 26 July 2023] passed by the Assistant Commissioner of Income-tax - International tax Circle 3(1)(1) Mumbai ('Ld. AO') under section 143(3) read with section 144C(13) of the Income-tax Act, 1961 (Act') is bad in law and void ab initio. 2. On the facts and in the circumstances of the case and in law, the final assessment order dated 26 July 2023 passed by the Ld. AO under section 143(3) read with section 144C(13) of the Act having been passed beyond the limitation provided in terms of section 153 of the Act, is illegal, being barred by limitation, void-ab-initio and is therefore, liable to be quashed. 3. On the facts and in the circumstances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l assessment order dated 26 July 2023. 6. On the facts and in the circumstances of the case and in law and as a consequence of the misstatement by the Ld. AO in Ground 5 above, the Id. AO erred in determining the Total Income of the Appellant amounting to INR 347, 883 ,770/- and thereby, consequentially determining the demand of INK 137, 496 ,340/-. 7. On the facts and in the circumstances of the case and in law and as a consequence of the misstatement by the Ld. AO in Ground 5 above, the Ld. AO erred in consequential levying interest under section 234A & 234B of the Act amounting to INR 393,334,944/-- 8. On the facts and in the circumstances of the case and in law, the Ld. AO has erred in initiating penalty proceedings under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the assessee in the return of income that it has set off STCG on sale of derivatives amounting to Rs. 23,07,57,354/- and STCG on physical settlement of derivatives amounting to Rs. 4,56,47,848/- which was taxable at the rate of 30% with current year, STCL on sale of equity on which STT was paid taxable at the rate of 15% amounting to Rs. 25,49,24,728/- and has set off the above balance STCG with STCL brought forward from the A.Y. 2019-20 amounting to Rs. 2,14,80,473/-. After perusal of the aforesaid information the AO was of the view that STCG on sale of derivatives was in the nature of speculative gain and attracts tax liability at the rate of 30% + cess and surcharge and the STCL on sale of equity shares (STT paid) cannot be set off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of STCL in different categories on the basis of tax rates. In support of his contention the Ld. Counsel has referred the various judicial pronouncements as under: 1. CIT v. Rungamatee Trexim (Pvt) Ltd. - ITA No. 812 of 2008 (Kol. HC) (2008) 2. First State Investments (Hongkong) Ltd. v. ADIT (International Taxation) - ITA No. 2895/Mum/2008 3. GSB Capital Markets Ltd. v. DCIT - ITA No.307/Mum/2014 4. ADIT (International Taxation) v. Legg Mason Asia (Ex Japan) Analyst Fund - ITA No. 7625/Mum/2011 5. VEMF -A, LP v. DCIT - ITA No. 6727/Mum/2016 6. On the other hand, the Ld. D.R. supported the order of lower authorities. 7. Heard both the sides and perused the material on record. During the year under consideration the assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be set off against income arising from such assets for same year, irrespective of whether transactions are categorized as off market transactions or on market transactions. 8. We have also gone through the decision of ITAT, Mumbai in the case of VEMF-A, LP (supra) wherein on identical issue and similar fact the ITAT has decided the issue in favour of the assessee. The relevant extract of the decision is reproduced as under: "7. We have heard the rival submissions and perused the relevant material on record. We begin with the decisions cited before us. In First State Investments (Honkong) Ltd. (supra), the assessee earned STCG on sale of shares in the A.Y. 2005-06. It bifurcated such STCG into two periods i.e. upto 30.09.2004 (in which t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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