Shah Rukh Khan must be heaving a sigh of relief as he has got an acquittal from Income Tax Appellate Tribunal (ITAT) in two income tax related issues which date way back to his Kaun Banega Crorepati income.
Income Tax department had served SRK with two notices for allegedly not paying proper income tax about 8 months back and had sought details of the actor’s investments in destinations such as Bermuda, British Virgin Islands (BVI) and Dubai.
Getting an acquittal by ITAT has some miffed the IT department and left them red-faced.
In the first case, IT department disallowed SRK’s claim of a deduction of INR 10 crores which he claimed as an expense while computing his business income. In the second case, IT department demanded tax for INR 7 crore which SRK would have charged as fees when he attended some press conferences in London and Dubai along with Star India.
In both these cases ITAT found SRK not guilty of any tax evasion.
According to the ITAT ruling, Star India and Shah Rukh had entered into an agreement for 104 episodes for SRK to host the game show. However, after 52 episodes, the TV channel decided to shelve the remaining episodes and wanted to recover the money from the ‘Raees’ actor. Instead of returning the money, Khan struck a barter deal whereby he would secure sponsorship along with Kolkata Knight Riders (his IPL team). He would pay INR 10 crores to the team and in return sponsorship rights were to be given to Star India.
SRK said that those conferences and promotions never happened so there was no case of any income being generated from them and hence no need to pay any tax. In this case too, ITAT ruled in favour of Khan disallowing the tax department of any such additions.
Now it has been reported that the IT department is now considering the next level of judiciary and of approaching the Bombay High Court in this regard.