Binny Bansal Vs DCIT (ITAT Bangalore)
ITAT Bangalore held that at the relevant time co-founder of Flipkart stayed in India for 141 days and balance days in other countries. Hence, assessee is an Indian national and thus the appeal of the assessee is dismissed.
Facts- The assessee is a co-founder of Flipkart, an online e-commerce platform. For Assessment Year 2020-21, the assessee is a non-resident Indian. The case of the assessee was selected for scrutiny.
Notably, the assessee sold equity shares of Indian companies listed on stock exchange in India. He also sold shares in Flipkart Private Limited Company Incorporated in Singapore. The claim of the assessee that he was a resident of Singapore and therefore, pursuant to the provisions of section 90 (2) of the Act, the assessee is entitled to the benefit of India Singapore Double Taxation Avoidance Agreement [DTAA]. Therefore, the capital gain arising from sale of 5,39,912 shares of Flipkart Private Limited, a Singapore company, to FIT Holdings SARL are not taxable in India as per Article 13 (5) of the India Singapore Tax Treaty. Another fact relevant to the issue is that the purchaser FIT Holdings SARL on sale of the above shares on 21 June 2019 has deducted tax at source amounting to ₹ 656,963,526/–. The explanation of the assessee is that the assessee had sold shares of Flipkart Private Limited to the above entity on 21st of June 2019. The assessee’s claim is that the gain arising from the transfer of such shares is exempt under Article 13 (5) of India Singapore tax treaty. However, tax was deducted by the buyer on the long-term gains prior to considering the benefit under Article 13 (5) of the India Singapore tax treaty. Further the share transfer undertaken on 27 November 2019 the assessee submitted that the gain arising on the transfer of the 5,39,912 shares of FlipKart are not taxable under the Income Tax Act itself in view of Explanation 7 (a) to section 9 (1) (i) of the Act. However, the tax was deducted by the buyer on the long-term gains prior to considering the provisions of the above Explanation of the Act.
