| Chennai |
September 12, 2020 12:20:57 am
The Income Tax Department on Friday moved a petition in Madras High Court accusing Oscar-winning music composer A R Rahman of evading tax by allegedly routing earnings by his non-profit organisation, A R Rahman Foundation.
Admitting the attraction, a High Court division bench of Justices T S Sivagnanam and V Bhavani Subbaroyan ordered a discover to be issued to Rahman.
In the petition, the I-T Department has requested whether or not the composer was utilizing A R Rahman Foundation as a “conduit for accounting his own untaxed income, and as a tool for siphoning his funds”. The petition alleges that Rahman had routed earnings of Rs 3.47 crore by the Foundation, a registered charitable belief that he instantly manages.
Money paid to the organisation is just not taxable, as it’s a charitable belief.
The division moved the court docket after I-T Tribunal earlier put aside proceedings initiated towards Rahman.
Rahman’s authorized counsels will subsequent reply to the discover in court docket.
The I-T Department’s counsel, T R Senthil Kumar, instructed the court docket that Rahman obtained earnings of Rs 3.47 crore in evaluation yr 2011-12 in reference to an settlement with UK-based firm Libra Mobiles. The division has acknowledged that Rahman requested the corporate to pay his remuneration on to his basis. His three-year contract with Libra Mobiles constituted composing unique cellphone ringtones.
Arguing that the earnings that was taxable will need to have been obtained by Rahman himself, Senthil Kumar submitted that Rahman may have transferred the quantity to the belief after deducting earnings tax. But, the counsel submitted, the quantity was routed by A R Rahman Foundation, which was exempted from paying tax underneath the Income Tax Act as a charitable belief.
According to the petition, the I-T Tribunal had “failed” to contemplate the truth that Rahman had obtained the quantity in his particular person capability, and that he didn’t submit these skilled receipts in his earnings tax return for evaluation yr 2011-12.
The petition appeals to the court docket to resolve “whether the appellate is right in law in not taking into cognisance that the assessee is the managing trustee of A R Rahman Foundation, and has used the Foundation as a conduit for accounting his own untaxed income and as a tool for siphoning his funds”.
According to the petition, after receiving the I-T discover Rahman had moved the Income Tax Appellate Tribunal in Chennai. In September 2019, the tribunal held that the Union authorities had accorded “post facto approval” with respect to this contribution. The Tribunal dominated in favour of Rahman discovering that the quantity was not taxable.
The petition stated the order of the Tribunal is “erroneous in law” and against information and circumstances of the case. The assessing officer (AO), it acknowledged, had not made any try to look at the varied clauses of settlement nor tried to make enquiry to establish information. Also, the AO didn’t collect any materials in the course of the course of reassessment proceedings to return to the identical conclusion arrived at in the course of the authentic evaluation.
-With PTI inputs
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