Assesses, a FII based in Mauritius, had claimed short-term and long-term capital gains from transfer of securities in Indian market as exempt under Article 13 of Indo-Mauritius DTAA . Assessee also claimed to carry forward capital losses which were brought forward from earlier years to subsequent years .Assessing Officer  held that  when capital gain arising to assessee was not taxable in India, capital loss would also be exempted and assessee could not claim carry forward of said capital losses.  .  DRP  directed the Assessing Officer to allow carry forward of the short term capital gains   brought forward from the preceding years    Tribunal held that  Assessing Officer was not justified in holding that capital losses brought forward from earlier years, pertaining to a source of income that was exempt from tax was not to be carried forward to subsequent years and thus, assessee was duly entitled for carry forward of its brought forward capital losses to subsequent years . brought forward short term  and Long term capital gains  of earlier years were not to be adjusted against exempt short term capital gain and Long-term capital gain earned by assessee from transfer of securities during year in question .  (AY. 2013 -14  )