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I-T dept says tax evasion by A R Rahman, moves plea in Madras HC

Written by Arun Janardhanan
| Chennai |

September 12, 2020 12:20:57 am

AR Rahman has been issued a discover within the tax evasion case.

The Earnings Tax Division on Friday moved a petition in Madras Excessive Courtroom accusing Oscar-winning music composer A R Rahman of evading tax by allegedly routing revenue by way of his non-profit organisation, A R Rahman Basis.

Admitting the enchantment, a Excessive Courtroom division bench of Justices T S Sivagnanam and V Bhavani Subbaroyan ordered a discover to be issued to Rahman.

Within the petition, the I-T Division has requested whether or not the composer was utilizing A R Rahman Basis as a “conduit for accounting his personal untaxed revenue, and as a software for siphoning his funds”. The petition alleges that Rahman had routed revenue of Rs 3.47 crore by way of the Basis, a registered charitable belief that he instantly manages.

Cash paid to the organisation will not be taxable, as it’s a charitable belief.

The division moved the courtroom after I-T Tribunal earlier put aside proceedings initiated towards Rahman.

Rahman’s authorized counsels will subsequent reply to the discover in courtroom.

The I-T Division’s counsel, T R Senthil Kumar, instructed the courtroom that Rahman acquired revenue of Rs 3.47 crore in evaluation yr 2011-12 in reference to an settlement with UK-based firm Libra Mobiles. The division has acknowledged that Rahman requested the corporate to pay his remuneration on to his basis. His three-year contract with Libra Mobiles constituted composing unique cellphone ringtones.

Arguing that the revenue that was taxable should have been acquired by Rahman himself, Senthil Kumar submitted that Rahman might have transferred the quantity to the belief after deducting revenue tax. However, the counsel submitted, the quantity was routed by way of A R Rahman Basis, which was exempted from paying tax underneath the Earnings Tax Act as a charitable belief.

In keeping with the petition, the I-T Tribunal had “failed” to contemplate the truth that Rahman had acquired the quantity in his particular person capability, and that he didn’t submit these skilled receipts in his revenue tax return for evaluation yr 2011-12.

The petition appeals to the courtroom to determine “whether or not the appellate is correct in legislation in not taking into cognisance that the assessee is the managing trustee of A R Rahman Basis, and has used the Basis as a conduit for accounting his personal untaxed revenue and as a software for siphoning his funds”.

In keeping with the petition, after receiving the I-T discover Rahman had moved the Earnings Tax Appellate Tribunal in Chennai. In September 2019, the tribunal held that the Union authorities had accorded “publish facto approval” with respect to this contribution. The Tribunal dominated in favour of Rahman discovering that the quantity was not taxable.

The petition stated the order of the Tribunal is “misguided in legislation” and against details and circumstances of the case. The assessing officer (AO), it acknowledged, had not made any try to look at the varied clauses of settlement nor tried to make enquiry to determine details. Additionally, the AO didn’t collect any materials through the course of reassessment proceedings to return to the identical conclusion arrived at through the unique evaluation.

-With PTI inputs

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