The Income Tax Appellate Tribunal (ITAT) has provided significant relief to superstar Shah Rukh Khan in a tax dispute dating back to 2011-12.
Entertainment: The Income Tax Appellate Tribunal (ITAT) has ruled in favor of superstar Shah Rukh Khan in a tax dispute from 2011-12, granting him significant relief. The ruling declares the Income Tax Department's proceedings against him invalid. The case pertained to tax payments related to the earnings from the film 'Ra.One,' which Khan received in the UK.
Shah Rukh Khan Wins Tax Case
The Income Tax Appellate Tribunal (ITAT) ruled in favor of superstar Shah Rukh Khan, dismissing tax proceedings initiated against him for the financial year 2011-12. The dispute centered on alleged non-payment of taxes in India on earnings from his film 'Ra.One.' The Income Tax Department claimed the actor had committed tax evasion and not fully disclosed his foreign income. However, the ITAT deemed these proceedings legally unsound.
Details of the Case
The case dates back to 2012-13 when Shah Rukh Khan declared earnings of ₹83.42 crore in his Income Tax Return (ITR). However, the Income Tax Department suspected the actor had not fully disclosed his income and had concealed some amount. This suspicion led to a reassessment of his income. The case was related to his earnings from the film 'Ra.One,' for which he received a fee of ₹10 crore.
Tax Dispute on Foreign Income
Shah Rukh Khan received his ₹10 crore fee for 'Ra.One' through a UK-based company. ₹1 crore was deducted as TDS, and the remaining ₹9 crore was transferred to the UK company. Subsequently, the UK company deducted ₹1.40 crore as Foreign Exchange Tax (FEU), leaving Khan with ₹7.6 crore.
Khan declared this amount as foreign income and paid ₹2.70 crore in taxes in the UK. However, Indian tax authorities considered this tax evasion and initiated an investigation. Their argument was that this payment structure resulted in a loss of tax revenue for the Indian government.
ITAT Dismisses Income Tax Department's Claim
In its order, the ITAT stated that the proceedings initiated against Shah Rukh Khan by the tax authorities were not legally valid. ITAT judges Sandeep Singh Karhel and Girish Agrawal, in their ruling, stated that the Assessing Officer (AO) failed to provide a b basis for reassessing the case within four years. Therefore, the investigation process was deemed invalid.
