The Supreme Court on Monday asked the Income-Tax department to explain why actor Amitabh Bachchan was allowed to withdraw his security expense claim amounting to 30% of around Rs 6.90 crore, the actor’s income from popular TV game show ‘Kaun Banega Crorepati’ in 2001-02.
The department said while Bachchan had in his original income tax return for 2001-02 declared total income of around Rs 4.61 crore, he had filed revised returns on October 31, 2002, declaring total income of around Rs 6.08 crore.
In his second revised returns on March 31, 2003, he declared total income of Rs 3.23 crore approximately while his receipts from KBC were at Rs 6.90 crore and an additional expenditure of Rs 3.17 crore (30 per cent of professional receipts) was shown.Online GST Certification Course by TaxGuru & MSME- Click here to Join
According to the department, after the second revised returns, the authorities had issued showcause notice to the actor on November 7, 2005, under Section 263 of the Income-Tax Act on the grounds that the returns were erroneous and prejudicial to the interests of the revenue.
However, the department said the actor had withdrawn its re-revised returns that had 30% estimated expenses claim, on March 13, 2004.
Bachchan had subsequently retracted by stating that the earlier explanation was given by his representative without cross-checking facts with him, the department added.
It said that Bachchan had submitted before the authorities that the 30% expenses claim was made under the mistaken belief that it was available as a standard deduction and thus had withdrawn it later.
The Commissioner of Income Tax, while setting aside the assessment, had held that despite the withdrawal of the claim the assessing officer was under duty to make further enquiries about whether these security expenses were made from any undisclosed income.
However, the Income Tax Appellate Tribunal on May 18, 2005, while allowing Bachchan to withdraw the claim had quashed the CIT’s order saying that the Commissioner’s order travelled beyond the grounds in the show cause notice and thus was violative of natural justice.