Shah Rukh Khan’s Victory in ITAT: A Landmark Ruling
MUMBAI: In a significant legal triumph, Bollywood superstar Shah Rukh Khan has emerged victorious as the Income Tax Appellate Tribunal (ITAT) quashed the reassessment proceedings initiated by tax authorities for the financial year 2011-12. This decision marks a pivotal moment in Khan’s ongoing battle concerning foreign tax credit claims related to his earnings from the film ‘RA One.’
The Background of the Dispute
Khan declared an income of Rs 83.42 crore in his income-tax return. However, tax authorities denied his claims for foreign tax credit, asserting that his income should be reassessed to Rs 84.17 crore. The ITAT ruled that this reassessment was not legally justified, especially since it occurred more than four years after the relevant assessment year (2012-13).
Key Findings of the ITAT
The ITAT bench, comprising Sandeep Singh Karhail and Girish Agrawal, emphasized that the assessing officer failed to provide any new evidence warranting such a reassessment beyond the four-year statutory limit. The tribunal reiterated that reassessments under Section 147 can only occur post the four-year period under specific conditions, none of which were met in Khan’s case.
This ruling not only reinstates Khan’s claims but also underscores the importance of protecting Indian taxpayers with overseas earnings from arbitrary reassessments.
Implications for Taxpayers
Tax experts believe this judgment strengthens the legal standing of Indian taxpayers against unwarranted tax assessments. It reaffirms that tax authorities must have substantial grounds before initiating reassessments.
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In conclusion, Shah Rukh Khan’s victory serves as a reminder of the critical balance between tax obligations and the rights of taxpayers, particularly those engaged in international ventures.
