India: Capital gains exemption under India-Cyprus treaty granted in absence of evidence to rebut tax residency certificate (Tribunal decision)

Tax authority offered no evidence to rebut tax residency certificate or otherwise support allegation of treaty abuse

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May 19, 2025

The Delhi Bench of the Tribunal held that a taxpayer incorporated in Cyprus was entitled to the capital gains exemption on sales by nonresidents of shares in Indian companies under the India-Cyprus in the absence of any substantive evidence from the tax authority challenging the taxpayer’s tax residency certificate (TRC) or otherwise supporting an allegation of treaty abuse.

The case is: Gagil FDI Ltd. v. ACIT (ITA No. 2661/Del/2024)

Read a May 2025 report prepared by the KPMG member firm in India

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