The Income Tax Appellate Tribunal (ITAT) Bengaluru bench has dismissed non-Indian resident claims made by Binny Bansal, the co-founder of Flipkart, and effectively denied him tax benefits under the India-Singapore Double Taxation Avoidance Agreement (DTAA).
Bansal, in his appeal had argued that he has resided outside India, in Singapore, for employment and hence should be “qualified as a person who ‘being outside India, (but) comes on a visit to India’, and thus, should be classified as a Non-Resident.”
The ITAT however quashed the argument and said, “…on the basis of the above submission and findings of the fact we hold that assessee (Binny Bansal) has been in India for more than 60 days and satisfied the residential test of provisions of section 6 (1) (c) of the Act and is not entitled to the relaxation…”
Bansal, who did not respond to a request for comments, is eligible to challenge the order in a higher court.
In his argument, Bansal had also stated that since he has lived in Singapore, and not India, he is not liable to pay capital taxes on the income he earned by selling his shares in Flipkart.
During the financial year (FY) 2019–20, Bansal sold equity shares of Indian companies listed on the stock exchange in India. He also sold shares in Flipkart Private Limited Company, incorporated in Singapore, during the financial year 2019–20.
In 2019, through a series of transactions, Bansal sold around 600,000 shares to Tiger Global and other investors and since he was a resident of Singapore, he was not entitled to pay taxes in India as entitled to the benefit of India Singapore Double Taxation Avoidance Agreement [DTAA], Bansal argued.
The ITAT, in a 189-page order passed on January 9, dismissed those claims.
The tribunal also directed the assessing officer to verify and reissue a pending refund of more than Rs 5.8 crore if not already credited.
Bansal had ended his association with Flipkart in 2023 and went on to start his own AI e-commerce company, Oppdoor.
