ESTEE INDIA FUND ,MAURITIUS vs. ACIT CIRCLE INT TAX 1(2)(2), DELHI

ITA 1955/DEL/2025Status: DisposedITAT Delhi12 March 2026AY 2022-2310 pages
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What did the Tribunal hold?

The Tribunal held that stock derivatives and shares are distinct assets, and gains from trading stock derivatives fall under Article 13(4) of the India-Mauritius DTAA, making them taxable only in the country of residence. However, grounds related to consequential interest and premature penalty proceedings were dismissed.

What were the facts?

The assessee, a Mauritius tax resident, traded in currency and stock derivatives. The Assessing Officer treated gains from stock derivatives as capital gains taxable in India under Article 13(3A) of the India-Mauritius DTAA, contrary to the assessee's claim of exemption. The Dispute Resolution Panel (DRP) concurred with the Assessing Officer.

What were the issues?

Whether gains derived from trading in stock derivatives are taxable as capital gains on shares under Article 13(3A) of the India-Mauritius DTAA, or fall under Article 13(4) and are taxable in the country of residence.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144C(13),Section 234A,Section 234B,Section 234C,Section 270A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH D : NEW DELHI

Before: SHRI VIKAS AWASTHY & SHRI BRAJESH KUMAR SINGH

For Appellant: Shri Sanjeev Kapoor, CA
For Respondent: Shri M.S. Nethrapal, CIT-DR
Hearing: 15.12.2025Pronounced: 12.03.2026

PER VIKAS AWASTHY, JM:

This appeal by the assessee is directed against the assessment order dated 14th January, 2025 passed under Section 143(3) read with Section 144C(13) of the Income-tax Act, 1961 (hereinafter referred to as 'the Act') for the assessment year 2022-23. 2. The assessee in appeal has assailed the addition of Rs.60,42,042/- made by the Assessing Officer treating gain on trading of derivatives as capital gain on sale of shares.

3.

Facts of the case in brief as emanating from the records are: The assessee is a quant multi strategy market-neutral dollar hedged fund and is a t

The order continues below.

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