The Supreme Court of India has delivered a landmark ruling against US-based investment firm Tiger Global, upholding the Income Tax Department's claim to tax capital gains from Tiger Global's approximately $1.6 billion (₹14,440 crore) stake sale in Flipkart to Walmart in 2018. This decision is a significant reversal of an August 2024 Delhi High Court judgment that had previously exempted Tiger Global from capital gains tax under the India-Mauritius Double Taxation Avoidance Agreement (DTAA). The core of the dispute revolved around Tiger Global International III Holdings, a Mauritius-based entity, utilizing the India-Mauritius DTAA to claim tax exemption on the gains from selling shares of Flipkart Singapore, which held substantial Indian assets. The Indian tax authorities argued that Tiger Global's Mauritius entities were mere "conduit" companies, lacking sufficient economic substance, and were primarily established to exploit treaty benefits for tax avoidance. They contended that the real beneficial owner was the US-based parent entity, Tiger Global Management LLC. Initially, in 2020, the Authority for Advance Rulings (AAR) had rejected Tiger Global's plea for tax exemption, stating the transaction was structured for tax avoidance. However, the Delhi High Court later overturned this, asserting that the DTAA's "grandfathering" provisions protected shares acquired before April 1, 2017, and that a Tax Residency Certificate (TRC) from Mauritius was sufficient proof for treaty benefits. The Supreme Court, by setting aside the High Court's order, has sided with the tax department, emphasizing that the mere possession of a TRC does not preclude a detailed inquiry into the economic substance of interposed entities. This ruling has wide-ranging implications for foreign investors structuring their investments in India, potentially redefining the interpretation of tax treaties and the enforcement of anti-abuse provisions. It signals a tougher stance by Indian authorities on treaty shopping and a greater scrutiny of offshore holding structures, balancing investor certainty with tax fairness. The decision is expected to establish important precedents for cross-border investment taxation in India.