India's Supreme Court delivered a significant judgment on January 15, 2026, ruling that US-based investment firm Tiger Global Management LLC is liable to pay capital gains tax on its $1.6 billion stake sale in e-commerce giant Flipkart to Walmart, which occurred in 2018. This apex court decision marks a major victory for the Indian tax authorities, overturning an August 2024 judgment by the Delhi High Court that had previously granted tax relief to Tiger Global's Mauritius-based entities. The Supreme Court bench, comprising Justices J.B. Pardiwala and R. Mahadevan, held that the transaction was structured as an "impermissible tax avoidance arrangement." It found that Tiger Global's Mauritian subsidiaries were merely "routing vehicles" and lacked genuine economic substance, with the real control and decision-making originating from the US parent company. Consequently, the court denied Tiger Global the benefit of tax exemption under the India-Mauritius Double Taxation Avoidance Agreement (DTAA). The firm had argued for exemption based on the DTAA's "grandfathering" clause for investments made before April 1, 2017, but the court ruled that such benefits could not be claimed if the arrangement was primarily for tax avoidance. This landmark ruling has far-reaching implications for foreign portfolio investors and private equity funds operating in India, especially those utilizing offshore structures in tax-friendly jurisdictions like Mauritius or Singapore. It strengthens the Indian government's stance on taxing cross-border transactions where the underlying economic activity is rooted in India and sets a crucial precedent for the interpretation and application of international tax treaties, reaffirming India's sovereign right to tax income generated within its borders. The decision essentially reinstates the original tax demand on Tiger Global and signals a stricter approach towards treaty shopping and arrangements perceived as lacking commercial rationale.