Bollywood superstar Shah Rukh Khan has secured a significant legal victory in a long-standing tax dispute, with the Income Tax Appellate Tribunal (ITAT) ruling in his favor. The tribunal overturned the reassessment proceedings initiated by the Income Tax Department for the 2011-12 financial year, declaring the reassessment order as legally unjustified.
ITAT Overturns Tax Reassessment
According to a report by The Times of India, the tax authorities had questioned Shah Rukh Khan’s declared income of ₹83.42 crore, rejecting his claim for foreign tax credit on taxes paid in the UK. Following this, the department reassessed his income at ₹84.17 crore, arguing that a portion of his earnings from the film RA.One should be subject to higher taxation in India.
The reassessment proceedings were initiated more than four years after the relevant assessment period (2012-13), which the ITAT bench found legally untenable. The tribunal, consisting of Sandeep Singh Karhail and Girish Agrawal, ruled that the reassessment was invalid, stating that the tax authorities failed to present any new tangible evidence to justify reopening the case beyond the four-year statutory limit.
Dispute Over Foreign Tax Credit
The tax litigation centered around Shah Rukh Khan’s remuneration for RA.One, which was released in 2011. The agreement between the actor and Red Chillies Entertainment, a production company co-founded by Khan, specified that 70% of the film’s shooting would take place in the UK. Consequently, 70% of the income generated would be subject to UK taxation, including withholding tax.
To facilitate this arrangement, Shah Rukh Khan’s remuneration was routed through Winford Production, a UK-based entity. However, the Indian tax authorities contended that this structure resulted in a revenue loss to India, leading to a dispute over the foreign tax credit claims made by the actor.
The ITAT bench ruled in Khan’s favor, emphasizing that the assessing officer had already scrutinized this issue in the initial assessment and had failed to provide fresh evidence to warrant a reassessment. The tribunal concluded that the reassessment proceedings were invalid on multiple grounds.
Shah Rukh Khan’s Upcoming Projects
On the professional front, Shah Rukh Khan is currently working on his next film, King, which will mark the Bollywood debut of his daughter Suhana Khan. The film is set to go on floors in March 2025 and will have a global release in 2026. Meanwhile, the actor is currently in Jaipur to attend the 25th edition of the IIFA Awards.
This tax dispute victory comes as a relief for the Bollywood icon, reaffirming his stance in the ongoing legal battle with tax authorities.
Sources By Agencies
