SC issues notice to actor Amitabh Bachchan in tax matter

New Delhi, May 4 (PTI) The Supreme Court of India Monday
issued notice to Bollywood actor Amitabh Bachchan asking him
to give details of his income and proof of the security
expenses amounting to 30 per cent of around Rs 6.90 crore
incurred by him in 2001-02.

The actor had income of around Rs 6.90 crore from the
popular TV game show 'Kaun Banega Crorepati' in 2001-02.

A Bench headed by Justice S H Kapadia asked Bachchan to
provide proof of his income and documents relating to security
expenses.

The I-T department has alleged that Bachchan's
representative before the authorities had earlier claimed
having incurred 30 per cent estimated expenses on security to
protect the assessee from extortion, something the actor had
himself later withdrawn.

Additional Solicitor General Gopal Subramanium said
Bachchan had first stated his claim as security expenses and
then justified it as standard deduction.

Given the assessee's statement that "the expenses were
made out of cash balances, the subsequent assertion that
expenses were never made was extremely suspect," the
department said in its affidavit.

"Although the Assessing officer did initially enquire as
to why Section 69 (C) should not be attracted in this case, on
noticing the variance in different explainations offered by
the assessee, it was incumbent on the Assessing Officer to
make further detailed enquiry - which he failed to do," it
added.

Under Section 69(C) of the Income-Tax Act, unexplained
expenditure incurred by an assessee is to be deemed as his
income.

The Income-Tax department has challenged a Bombay High
Court judgment of August 7, 2008, which dismissed its plea and
upheld the sectoral tribunal order that quashed the
Commissioner of Income-Tax's order.

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 approximately Rs 3.23 crore 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.

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.

However, the department said the actor had withdrawn its
re-revised returns that had 30 per cent estimated expenses
claim, on March 13, 2004.

Bachchan had 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 per cent 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 showcause notice and thus
was violative of natural justice.

Earlier, the I-T department had challenged another order
of the High Court which allowed exemption on 30 per cent of
Bachchan's total income of Rs 50.92 crore from the show on the
grounds that since the actor is an artiste he should be given
tax relief under Section 80 RR of the Income-Tax Act.