Tribunal upholds actor's claim that it was gift
A Dubai villa owned by Shah Rukh Khan was out of the tax ambit, the Income Tax Filing Appellate Tribunal (I-TAT) has ruled.
Called Signature Villa, the property was gifted to him by Nakheel Public Joint Stock Company. The dispute was over whether this was a gift or payment for services Khan had rendered to the company.
Since the villa was gifted in the assessment year (AY) 2008-09, it was tax free, ruled the I-TAT. The I-T Act was amended in October 2009 to include any gift valued more than a certain amount to be taxable.
An I-T officer assessing Khan’s 2008-09 income had revised it to Rs 144.17 crore against Rs 126.31 crore declared by him. The difference of Rs 17.9 crore was the value of the villa.
The assessing officer had contended the value of the property was the “professional receipts” taxable under Section 28 (iv) of the Efiling Of Income tax Act, 1961.
Khan, in a letter on November 11, 2010, denied rendering any professional services to Nakheel PJSC. He said Sultan Ahmed Bin Sulayem, a senior executive of the company and his friend, had gifted him the villa. Khan also said there was no contractual agreement.
The assessing officer had argued that a major source of Khan’s income was endorsing products and performing in stage shows. In 2008-09, the actor had charged Rs 6.5-8 crore for each endorsement. He said the Nakheel PJSC was using the actor’s image to endorse its Palm Project since 2004 on its official website and other media.
Khan had visited the project in 2004 and 2005, and had taken part in an annual day celebration there in 2007, said the ... Read Full Article
Called Signature Villa, the property was gifted to him by Nakheel Public Joint Stock Company. The dispute was over whether this was a gift or payment for services Khan had rendered to the company.
Since the villa was gifted in the assessment year (AY) 2008-09, it was tax free, ruled the I-TAT. The I-T Act was amended in October 2009 to include any gift valued more than a certain amount to be taxable.
An I-T officer assessing Khan’s 2008-09 income had revised it to Rs 144.17 crore against Rs 126.31 crore declared by him. The difference of Rs 17.9 crore was the value of the villa.
The assessing officer had contended the value of the property was the “professional receipts” taxable under Section 28 (iv) of the Efiling Of Income tax Act, 1961.
Khan, in a letter on November 11, 2010, denied rendering any professional services to Nakheel PJSC. He said Sultan Ahmed Bin Sulayem, a senior executive of the company and his friend, had gifted him the villa. Khan also said there was no contractual agreement.
The assessing officer had argued that a major source of Khan’s income was endorsing products and performing in stage shows. In 2008-09, the actor had charged Rs 6.5-8 crore for each endorsement. He said the Nakheel PJSC was using the actor’s image to endorse its Palm Project since 2004 on its official website and other media.
Khan had visited the project in 2004 and 2005, and had taken part in an annual day celebration there in 2007, said the ... Read Full Article
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