GOLDMAN SACHS INVESTMENTS ( MAURITIUS ) LTD,MUMBAI vs. DCIT (IT) 2(3)(2), MUMBAI

per Sec. 74(1)(a) of the Act, therefore, pursuant to its aforesaid directions, it had therein directed that its observations recorded in Para 2.9 to Para 2.12 would also stand modified. We have given a thoughtful consideration to the aforesaid issue before us, and on the basis of our observations recorded hereinabove, we herein conclude that the assessee is duly entitled for carry forward of its brought forward Long term capital losses of Rs. 7,63,95,386/- to the subsequent years. Further, in terms of our observations and reasoning adopted for concluding that the brought forward STCL of the earlier years are not to be adjusted against the Short term capital gain earned by the assessee during the year in question, we herein direct that on the same basis the brought forward Long term capital losses of the earlier years shall not be set off against the Long term capital gain earned by the assessee from transfer of securities during the year in question i.e A.Y 2013-14. The Ground of appeal No. 3 is allowed in terms of our aforesaid observations. 14. As the ld. A.R has not pressed the Grounds of appeal Nos. 4 & 5, the same as per the concession of the ld. A.R are thus dismissed as not pressed. 15. We shall now deal with the contention of the assessee that the A.O had erred in law and facts of the case in levying interest under Sec. 234C of Rs.65,780/-. As is discernible from the orders of the lower authorities, the assessee had on 24.09.2012 received interest income amounting to Rs.1,73,91,400/- from Indian Oil Corporation Ltd on which tax was liable to be deducted at source. However, as submitted by the ld. A.R, the payer failed to deduct tax at source on the aforesaid interest income. Accordingly, the assessee on its own computed the tax liability on the interest income @ 21.012% i.e as per the provisions of Sec. 115AD of the Act, and on 12.10.2012 deposited tax amounting to Rs.36,54,281/-. In the backdrop of the aforesaid factual matrix, it was submitted by the ld. A.R that as the aforesaid interest income was liable to be subjected to deduction of tax at source, therefore, the assessee could not have been made liable for interest under Sec. 234C insofar the tax pertaining to said amount of income was concerned.

ITA No.2201/Mum/2017 A.Y. 2013-14 18 Goldman Sachs Investments (Mauritius) Ltd. Vs. DCIT (IT) 2(3)(2)

In order to support his aforesaid contention the ld. A.R had drawn our attention to „Explanation‟ to Sec. 234C of the Act. Further, reliance was placed by him on the order of the Hon‟ble High Court of Bombay in the case of DIT (International Taxation) Vs. NGC Network Asia LLC (2009) 313 ITR 187 (Bom). 16. We have deliberated at length on the aforesaid issue under consideration and find substantial force in the claim of the ld. A.R. As per the „Explanation‟ to Sec. 234C, for the purpose of computing the interest liability therein contemplated, the tax due on the returned income has to be reduced by any tax deductible at source in accordance with the provisions of Chapter XVII on any income which is subject to such deduction and is taken into account in computing the total income of the assessee. As observed by us hereinabove, the interest income of Rs.1,73,91,400/- received by the assessee from Indian Oil Corporation Ltd. was liable for deduction of tax at source, which however, was not done by the payer. Accordingly, in our considered view the tax deductible at source on the aforesaid amount of interest income, as stated by the ld. A.R, and rightly so, had to be excluded from the tax due on the returned income for the purpose of computing the interest liability under Sec. 234C of the Act. Our aforesaid view is supported by the judgment of the Hon’ble High Court of Bombay in the case of DIT (International Taxation) Vs. NGC Network LLC (2009) 313 ITR 187 (Bom). In its aforesaid order, it was observed by the Hon‟ble High Court that when a duty is cast on a payer to deduct and pay the tax at source, then on the payers failure to do so interest under Sec. 234B cannot be imposed on the payee assessee. Accordingly, in terms of our aforesaid observations, we are in agreement with the claim of the ld. A.R that the tax deductible at source on the aforesaid interest income received by the assessee from Indian Oil Corporation Ltd. was liable to be excluded at the time of working out the assessee‟s liability towards interest under Sec. 234C. We thus direct the A.O to recompute the interest liability under Sec. 234C in terms of our aforesaid observations. The Ground of appeal No. 6 is allowed as above.

ITA No.2201/Mum/2017 A.Y. 2013-14 19 Goldman Sachs Investments (Mauritius) Ltd. Vs. DCIT (IT) 2(3)(2)

Order pronounced in the open court on 24.09.2020

Sd/- Sd/- S. RIFAUR RAHMAN RAVISH SOOD (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) Mumbai, Date: 24.09.2020 PS : R. Kumar Copy of the Order forwarded to : 1. Assessee 2. Respondent 3. The concerned CIT(A) 4. The concerned CIT 5. DR “C” Bench, ITAT, Mumbai 6. Guard File BY ORDER, Dy./Asst. Registrar ITAT, Mumbai