Re-evaluation of the former records without new tangible material: Shahrukh Khan win Reassessment Battle

 

Here is a Triumph in Taxation by Shah Rukh Khan in a reassessment proceeding before ITAT Mumbai.

Let us have a Short Overview of the case:

The Income Tax Appellate Tribunal (ITAT) in Mumbai delivered an order related to actor Shah Rukh Khan’s appeal for the assessment year 2012-13.

The legal issues included the validity of the reassessment under section 147, regarding remuneration from the film “RA One,”. The reassessment had failed to consider the relief due under the India-UK bilateral treaty for his earnings from the blockbuster “RA One.”

The appellant, Shah Rukh Khan, challenged the reopening of the assessment under section 147, arguing that the reassessment lacked a clear justification and was based on an impermissible re-evaluation (change of opinion) of previous records rather than new tangible material. The Assessing Officer’s (AO) reasons for reassessment, particularly concerning the alleged excess claim of the foreign tax credit, were also questioned.

Upon review, the ITAT found the reassessment proceedings to be legally invalid. It held that the proceedings violated section 147, as it was initiated from a re-evaluation of the former records without new tangible material. The tribunal concluded that the reassessment was unjustified due to the absence of new material facts and the lack of full and true disclosure of material facts by the assessee.

As a result, the ITAT quashed the re-assessment proceedings and the consequent order. Since the appeal succeeded on jurisdictional grounds, the remaining grounds of the appeal were deemed academic and were not addressed. The appeal was allowed in favor of the assessee, Shah Rukh Khan.

The Copy Of the order is as under: