Delhi ITAT upholds Mauritius treaty benefits for pre-2017 share sales

The Delhi bench of the Income Tax Appellate Tribunal permitted the India-Mauritius Double Taxation Avoidance Agreement exemption for share transactions occurring before 2017. The tribunal established that a valid Tax Residency Certificate acts as adequate proof for treaty benefits and cannot be overridden by unverified conduit accusations from the revenue department. In international tax practice, the Tax Residency Certificate serves as the primary document establishing a foreign entity's residence for treaty purposes.

Previously, tax authorities frequently challenged holding structures by alleging conduit arrangements without concrete proof, creating uncertainty for foreign investors. Under the current legal position affirmed by this ruling, a valid TRC must be accepted by tax officers unless specific statutory exceptions apply. Tax professionals and corporate advisors must ensure clients maintain proper documentation including valid TRCs for pre-2017 investments.

Practitioners should watch for departmental appeals or further judicial clarifications on substance-over-form doctrines in cross-border structures. Ultimately, this ruling reinforces the evidentiary value of valid tax residency certificates in protecting legitimate treaty exemptions.