No tax relief for Flipkart co-founder Binny Bansal

MUMBAI: The Bengaluru bench of Income Tax Appellate Tribunal (ITAT) has dismissed Flipkart co-founder Binny Bansal's non-resident claim, denying him the benefit of India-Singapore Tax Treaty sought by him. The tribunal passed the final order on Jan 9.

In his appeal, Bansal argued that he had gone outside India (Singapore) for employment, and hence should be treated as a person 'being outside India.' Bansal also claimed that he was a resident of Singapore during the financial year 2019-20 and so, capital gains arising from the sale of his Flipkart shares undertaken in Aug 28, 2019 and Nov 27, 2019 are not taxable in India.

"...We hold that the assessee (Bansal) has been in India for more than 60 days and satisfied the residential test of provisions not section 6(1) c of the (Income Tax) Act and is not entitled to the relaxation in the period of stay...undisputedly, assessee is an Indian national," the tribunal said in its 189-page order. Bansal couldn't be immediately reached for a comment.

The tax department contended that relaxations under IT act pertaining to residential status being claimed by Bansal can apply only in case of a person who is already a non-resident and not to an Assessee who was a resident in the immediately preceding year. "If the stand of the assessee is accepted that for this assessment year [ AY 2020-21 ] also the assessee should get a benefit of extended time period of 182 days instead of 60 days as per the second limb of section 6 (1) ( c ) of the Act, than every person who visits India will get such an extension of period every year," the tribunal said. However, it said that in the result, the appeal filed by the assessee is 'partly allowed' which means that the tribunal upheld some of the appellant's arguments.

Bansal stepped down from the board of Flipkart in 2024, ending his association with the e-commerce firm he co-founded with Sachin Bansal in 2007.