The income-tax appellate tribunal (ITAT) has rejected the tax department’s view that a villa in Dubai gifted to Bollywood actor Shah Rukh Khan a decade ago was a camouflage to evade income tax. The tribunal has held that the value of the villa cannot be treated as the actor’s taxable income.
The villa had been gifted to Khan under a formal gift deed in 2007, after he obtained the RBI’s approval.
I-T authorities were of the view that the donor, Nakheel PJSC, a Dubai-based company known for the famous Palm Projects, had gifted the villa as it was keen on using the actor’s image and brand. The actor is a globally known figure and has endorsed various foreign brands for remuneration running into a few crores.
Thus, the gift was seen as remuneration to Khan for utilizing his brand image and in lieu of his stage performance at the company’s annual day event. In light of this, the I-T authorities sought to tax the value of the villa as income in SRK’s hands.