Supreme Court Stays HC’s Ruling Allowing Tax Relief to Tiger Global; Issues Require Thorough Consideration

Case Details: Authority for Advance Rulings (Income-tax) vs. Tiger Global International II Holdings - [2025] 170 taxmann.com 706 (SC)

Judiciary and Counsel Details

• J.B. Pardiwala & R. Mahadevan, JJ.
• N. Venkatraman, A.S.G., Mrs Nisha Bagchi, Sr. Adv., Raj Bahadur Yadav, AOR, Shashank Bajpai, Sachin Sharma, Padmesh Mishra, Venkatraman Chandrashekhara Bharathi, Ms Sweksha, Kalrav Mehrotra, K. Gupta, Advs. and G.C. Srivastava, Adv for the Petitioner.
• Harish Salve, Sr. Adv., Dr Shashwat Bajpai, Ms Parul Jain, Arijit Ghosh, Pradhuman Gohil, Alapati Sahithya Krishna, Ms Hetvi Ketan Patel, Rushabh N. Kapadia, Advs. and Mrs. Taruna Singh Gohil, AOR for the Respondent.

Facts of the Case

The Supreme Court has stayed the Delhi High Court ruling in the case of Tiger Global International II Holdings. The Apex Court held that issues raised by the Authority for Advance Rulings (Income-tax) in the petition require thorough consideration.

What was the Delhi High Court’s ruling?

The Delhi High Court, in the case of Tiger Global International III Holdings [2024] 165 taxmann.com 850 (Delhi), overturned the Delhi Authority for Advance Ruling (AAR) decision that denied Tiger Global exemption on capital gains from the sale of its stake in Flipkart under the India-Mauritius Double Taxation Avoidance Agreement (DTAA).

High Court Held

The High Court ruled that Tiger Global’s transaction was legitimate and not aimed at tax avoidance, allowing it to claim tax benefits under the treaty’s ‘grandfathering clause’ for capital gains on shares acquired before April 1, 2017. The court rejected the AAR’s view that Tiger Global was merely a “see-through entity” controlled by a US-based individual.

The High Court acknowledged Tiger Global’s significant economic activities, compliance with the required thresholds for expenses and liabilities, and the legitimacy of its Tax Residency Certificate (TRC) as proof of its bona fide status in Mauritius. The court further held that treaty shopping is not inherently objectionable unless explicitly shown to be solely for tax evasion.

List of Cases Reviewed

• Tiger Global International III Holdings v. Authority For Advance Rulings (Income-tax) [2024] 165 taxmann.com 850 (Delhi)/[2024] 468 ITR 405 (Delhi)(Para 6) stayed.