Mauritius DTAA Eligibility vis-à-vis Grandfathering

BACKGROUND

• The Asssessee¹ , is a Mauritius based entity, registered as a FPI with SEBI and possess a valid Tax Residency Certificate.
• During AY 2021-22 (‘relevant AY'), the Assessee earned long-term capital gains and short-term capital gains amounting to INR 225.71 crores and INR 39.66 crores respectively out of sale of shares/derivatives acquired prior to April 01, 2017. These capital gains were claimed as exempt by the Assessee in view of Article 13(3)/(4) of the India-Mauritius DTAA (‘the treaty').
• In addition, the Assessee incurred long-term capital losses of INR 11.29 crores during the relevant AY and had brought forward long-term capital losses of INR 45.67 crores from AY 2020-21. Further, the Assessee also had brought forward short-term capital losses of INR 9.94 crores after setting off INR 3.76 crores during the relevant AY. All these losses pertain to shares/derivatives acquired after April 01, 2017. These were carried forward by the Assessee for