Tax Residency Certificate established Mauritius treaty eligibility and shielded share-sale gains from Indian capital gains tax.

A valid Tax Residency Certificate established the assessee's Mauritius residence and treaty eligibility under the India-Mauritius DTAA, and the Revenue could not disregard that certificate without substantive contrary material. Because the shares were acquired before 1 April 2017, Article 13(3A) did not apply; capital gains were therefore governed by Article 13(4). On those facts, treaty protection was available and the gains from share sale were not taxable in India.

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Issues: Whether the assessee was entitled to treaty benefits under the India-Mauritius Double Taxation Avoidance Agreement on the basis of a valid Tax Residency Certificate, and whether the Revenue could dispute the assessee's residential status and entitlement to exemption from capital gains tax in India.

Analysis: The assessee held a valid Tax Residency Certificate, and the Tribunal had found that the share acquisition and subsequent sale had undergone regulatory scrutiny and approval. In light of the binding principle that the Revenue cannot go behind a valid Tax Residency Certificate to deny treaty eligibility or residential status, the assessee's status as a Mauritius resident and beneficial owner of the income was accepted. The shares were acquired prior to 1 April 2017, so Article 13(3A) did not apply, and the capital gains were governed by Article 13(4) of the treaty.

Conclusion: The assessee was entitled to treaty protection, and the capital gains arising from the sale of shares were not taxable in India.

Final Conclusion: No substantial question of law arose for interference, and the appeal was dismissed.

Ratio Decidendi: A valid Tax Residency Certificate is sufficient to establish treaty eligibility and residential status, and the Revenue cannot go behind it to deny treaty benefits absent substantive material to the contrary.

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