Flipkart Co-Founder Binny Bansal Held Indian Resident; DTAA Relief on Share Sale Denied

Shri Binny Bansal, co-founder of Flipkart, filed his return for AY 2020-21, claiming non-resident status after resigning from Flipkart in November 2018 and relocating to Singapore in February 2019. During FY 2019-20, he sold shares of Flipkart Private Limited (Singapore) and claimed exemption from Indian tax on capital gains under Article 13(5) of the India-Singapore DTAA.

The Assessing Officer, noting that Bansal spent 141 days in India during the year and over 365 days in the preceding four years, held him to be a resident under Section 6(1)(c) and, applying the DTAA tie-breaker, concluded that his permanent home and centre of vital interests remained in India.

Main Issue: Whether Binny Bansal was a non-resident for FY 2019-20 and entitled to DTAA protection for capital gains on sale of shares in a Singapore company.

ITAT’s Decision: The ITAT upheld his resident status. It held that the relaxed day-count test under Explanation 1(b) to Section 6(1)(c) applies only to non-residents “coming on a visit” and cannot be claimed by a person who was resident in earlier years.

The Tribunal found that Bansal had a permanent home in Bengaluru and that his personal and economic interests continued to be centred in India. Thus, DTAA benefits were denied and the capital gains were held taxable in India. Limited relief was granted only for verification-based claims relating to refunds and transfer-related expenses.

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