Overview
- The bench ruled that Tiger Global’s Mauritius entities are not entitled to India–Mauritius DTAA protection, so gains from the 2018 sale are taxable in India.
- The court set aside the August 2024 Delhi High Court decision and reinstated the AAR’s 2020 threshold rejection under Section 245R(2) based on a prima facie tax‑avoidance finding.
- The ruling applied GAAR principles, emphasizing economic substance over legal form, and held that a Tax Residency Certificate is only an eligibility document, not conclusive proof.
- The dispute concerned the sale of shares in Flipkart’s Singapore holding company to Walmart’s FIT Holdings SARL, with the shares’ value substantially derived from Indian assets.
- The decision bolsters the tax department’s position, with Financial Express reporting potential recovery of about Rs 15,000 crore, and tax experts expect investors to reassess offshore holding and exit structures.