In a notable achievement, actor Shah Rukh Khan has successfully resolved a tax dispute, as the Income Tax Appellate Tribunal (ITAT) has ruled in his favour. The tribunal has annulled the reassessment proceedings and the order issued by the tax authorities concerning the financial year 2011-2012.

Shah Rukh Khan wins tax dispute

A report from The Times of India indicates that the Income Tax Appellate Tribunal (ITAT) has annulled the reassessment proceedings concerning Shah Rukh Khan's income tax return. The tax officer challenged the actor's reported income of ₹83.42 crore and dismissed his claims for a foreign tax credit related to taxes paid in the United Kingdom. As a result, the officer revised the actor's income to a higher figure of ₹84.17 crore. This reassessment occurred over four years after the conclusion of the relevant assessment year, specifically for 2012-13. The ITAT bench determined that the income tax department's reassessment was not legally warranted, marking a significant victory for the actor in his protracted dispute regarding foreign tax credit claims. The litigation pertains to the taxation of Shah Rukh's earnings from the film RA One, released in 2011. The agreement between the actor and Red Chillies Entertainments, a film production and distribution company co-founded by Khan, specified that 70% of the film's shooting would take place in the UK, thereby designating 70% of the income as foreign earnings, which would be liable for UK taxation, including withholding tax. To implement this arrangement, the actor's remuneration was processed through Winford Production, a UK-based entity. The tax authorities argued that this payment structure resulted in a revenue loss for India.

More about the new judgment

The ITAT bench, consisting of Sandeep Singh Karhail and Girish Agrawal, has determined that the reassessment proceedings are invalid. They indicated that the assessing officer did not provide "any fresh tangible material" that would justify a reassessment beyond the statutory four-year limit. Furthermore, the bench noted that the contested issue had already been addressed during the initial scrutiny assessment of the case. Ultimately, the bench concluded that the reassessment proceedings were legally flawed on multiple grounds.

Shah Rukh’s work files

Shah Rukh is presently engaged in the production of his upcoming film, entitled King. This project will feature his daughter, Suhana Khan, in a significant role. Filming is scheduled to commence in March 2025, with a global release anticipated in 2026. Currently, he is in Jaipur to participate in the 25th edition of the IIFA Awards.

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