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Sour Cong-SP ties spell I-T move against Bachchan

Sour Cong-SP ties spell I-T move against Bachchan

Author: Abraham Thomas
Publication: The Pioneer
Date: March 26, 2009
URL: http://www.dailypioneer.com/165231/Sour-Cong-SP-ties-spell-I-T-move-against-Bachchan.html

In a move coinciding with the souring of relations between Amar Singh and the Congress, the Income Tax Department has turned on the heat on actor and Singh's close friend Amitabh Bachchan in an income tax waiver case.

On Wednesday, the Income Tax Department moved the Supreme Court to challenge a Bombay High Court order that awarded a waiver of income tax to Bachchan over a reported Rs 21-crore earning by him in the popular Kaun Banega Crorepati television series.

While it is a fact that Bachchan does not enjoy the trust of the Gandhis anymore, the Government's attempt to dig out a seven-month old case against the superstar is certain to irk the Samajwadi Party, knowing the close ties of party leaders Mulayam Singh and Amar Singh with the Bachchan family.

The income tax department, in its appeal challenging the HC order, contended that the superstar had been awarded a 30 per cent tax relief under Section 80 RR of the Income Tax Act which was not available to him. Bachchan had claimed this relief on the ground that he was an artist.

According to Section 80RR of the Income Tax Act, 25 per cent of the income brought into India by the assessee in convertible foreign exchange within a period of six months from the end of the previous year is deductible from the gross total income if he is able to prove he is a resident of India, he is an author, playwright, artist, musician and actor or a sportsman (including an athlete), the income derived by him is in the exercise of his profession and the income so received was from the Government of a foreign State or any person not resident in India.

The Government claimed that since the relief is available to artists who either perform outside the country or receive payment from foreign agencies, the same could not be availed by Bachchan. The Income Tax tribunal while seeking a reassessment declared that the assessee (Bachchan) acted as an anchor in the television programme show for M/s Star India Ltd. As remuneration he received a payment Rs 50.92 crore. The said payment was received from E-Entertainment Limited (EEL), a foreign company incorporated under the laws of the British Virgin Island. Of the said amount, Bachchan transferred 70 per cent to his company, M/s Amitabh Bachchan Corporation Limited.

But the I-T department sought to take a different view of the facts by contending that Bachchan could not be classified as an artist since he was an anchor in the show. Moreover, the show was shot in India and could not be termed as a foreign show. It was on these grounds the I-T department sought to assail the High Court decision.

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