Exempt LTCG under India-Mauritius DTAA cannot be Adjusted against Taxable Losses: ITAT

The Income Tax Appellate Tribunal (ITAT) ruled that exempt long-term capital gains (LTCG) under the India-Mauritius Double Taxation Avoidance Agreement (DTAA) cannot be adjusted against taxable losses. The tribunal held that the specific provisions of the DTAA provide an exemption for LTCG arising from the sale of certain shares, and this exempt income cannot be used to offset other taxable losses under the Income Tax Act. This decision clarifies the tax treatment of income exempt under international tax treaties and its interaction with the general provisions of the Income Tax Act regarding the set-off of losses.