Shahrukh Khan is one of the richest Bollywood celebs in the world. He also has properties across the globe, one of which is the stunning Dubai villa along the Palm beach which is worth Rs. 10 Crore and had been gifted to Khan under a formal gift deed in 2007 after he obtained the RBI’s approval. It recently came into news that the villa is not being income taxed for so many years. However, 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.
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 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.
Appealing before ITAT, Khan, through his counsel, said the chairman of the company, Sultan Ahmed Bin Sulayem, was his friend and thus wished to make the gift. He admitted to attending the annual day event but said he merely addressed the employees and did not perform on stage, which would have amounted to brand endorsement. On taxation of a gift in kind, ITAT pointed out that for the relevant financial year, gifts of immovable property made without any consideration were out of the tax ambit.
