Actor Shah Rukh Khan has won a significant victory in a fight with the Income Tax authorities, with the Income Tax Appellate Tribunal, or ITAT, ruling in his favour.
The argument centred on the taxation of his film RA One, released in 2011.
The IT department had challenged Mr Khan’s declared income of Rs 83.42 crore for 2011-2012, denying his claims for foreign tax credit for taxes paid in the United Kingdom.
Over four years later, the department determined his tax to be Rs 84.17 crore.
The ITAT concluded that the IT department’s evaluation of the case was not legally justified.
“Any fresh tangible material warranting a reassessment beyond the four-year statutory period,” the evaluating officer failed to demonstrate.
The assessing officer had failed to present “any fresh tangible material warranting a reassessment beyond the four-year statutory period,” according to ITAT.
The fault had previously been addressed at the initial scrutiny, hence, the re-assessment proceedings were illegal on multiple counts, according to ITAT.
According to Mr Khan’s agreement with Red Chillies Entertainment, 70% of the film’s shooting would take place in the United Kingdom, and therefore, an equal percentage of his income would be liable to UK taxes.
The IT Department said that such an arrangement resulted in revenue loss for India, and officials denied his claim for foreign tax credit.