The Bombay High Court on Thursday admitted an appeal filed by the Income Tax Department against Amitabh Bachchan in connection with the income of Rs 23 crore that he earned as host for the reality show Kaun Banega Crorepati (KBC).
The I-T department argued that Mr Bachchan received Rs 23 crore from E Entertainment (EEL) and Star Entertainment (SIL) in 2001-02, as per his contract to host KBC. The entire income was taxable, said the I-T department’s counsels Beni Chatterji and GC Srivastav.
But Mr Bachchan’s counsel S Dastur contended that since his client was engaged by Amitabh Bachchan Corporation (ABCL), he had to pay 70% of the said Rs 23 crore to it and his personal taxable income was only 30% of the amount.
In fact, according to the appeal, Mr Bachchan had filed returns on October 31, 2001, declaring income from KBC as being 30% of Rs 23 crore and claiming a deduction of Rs 21.67 crore as payment to ABCL.In March 2003, Mr Bachchan once again filed revised returns, declaring a total income of Rs 3.23 crore, wherein he had claimed 30% as expenses.
He also claimed that tax deducted under Section 80 RR from the receipt of KBC. The assessing officer had questioned the transfer of Mr Bachchan’s income to ABCL, Mr Chatterji told ET, adding that if there was a breach of contract between Mr Bachchan and ABCL, the latter could only claim damages and not transfer of income.
The appeal states that the assessing officer had observed that the agreement for KBC had nothing to do with the contract between Mr Bachchan and ABCL. Also, the income tax was deducted in regard to KBC and a TDS certificate was issued in the name of Amitabh Bachchan, and not ABCL.
The I-T department had moved the Income Tax Appellate Tribunal (ITAT) in connection with this tax issue but ITAT ruled in Mr Bachchan’s favour in May 2005, following which they appealed in the high court. The appeal was admitted by a division bench of Justices FI Rebeillo and RS Mohite against the order of ITAT and the matter will come up for final hearing in due course.
