The Income Tax (I-T) Department has appealed in Bombay high court against its tribunal’s order upholding actor Aamir Khan’s claim for tax deduction on an advance received by him although he did not perform at a concert in UK in June 2002.
The Income Tax (I-T) department has appealed in Bombay high court against its tribunal’s order upholding actor Aamir Khan’s claim for tax deduction on an advance received by him although he did not perform at a concert in UK in June 2002.
I-T has appealed against the October 5, 2009 order of the Income Tax Appellate Tribunal (ITAT). According to the I-T’s petition, Khan had entered into an agreement on April 23, 2002 with Clear Channel Entertainment for performing in two live shows.
He was paid a signing amount of Rs57.46 lakh. Of this, Rs12.64 lakh was withheld as tax deducted at source (TDS). The show was cancelled and the signing amount forfeited. Khan claimed Rs16.96 lakhs from the gross income as TDS under Section 80 RR (income from foreign sources) of Income Tax Act.
The assistant commissioner of I-T on January 30, 2006 disallowed deduction on the ground that Aamir has not performed any show by virtue of which he could claim it.
Aamir appealed before the Commissioner of Income Tax (Appeals). His application dated February 3, 2006 stated, “Merely because the organiser cancelled the show due to avoidable circumstances and not due to the appellant’s (Khan) fault, it can’t be said that the character of the income undergoes any change.”
Khan contended that TDS is considered while computing gross income for foreign shows and thus Rs12.64 lakhs should be included while computing deduction.
CIT (A) on November 22, 2007 dismissed his appeal ruling that Khan did not go abroad to earn this income and “it was clearly income from other sources.” Khan moved the tribunal which ruled in his favour. ITAT directed the AO to allow Khan’s claim for deduction. Against this, IT appealed in HC. When the matter came up for hearing last week no lawyer from the actor’s side was present. The division bench of Justice J P Devadhar and Justice Mridula directed IT’s advocate Padma Diwakar to send a lawyer’s notice to him.
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