Foreign Company Can Carry Forward Long-Term Capital Losses Without Offsetting Against DTAA-Exempt Gains Under Section 74

ITAT ruled on long-term capital gains from unlisted shares under India-Mauritius DTAA, specifically addressing loss carry-forward without offsetting against capital gains. The tribunal determined that long-term and short-term capital assets represent distinct income sources. Capital gains exempt under DTAA cannot enter Indian income computation. The loss from Maharana shares sale cannot be offset against gains from same company's shares as it would violate DTAA Article 13(3)(4). Following CBDT Circular No. 22/1944, ITAT directed allowing carry-forward of long-term capital loss under Section 74, preserving non-resident's right to claim future relief for losses incurred in India, without mandatory offset against DTAA-exempt gains. .....

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