The Bombay high court recently dismissed an income tax department appeal against Amitabh Bachchan, which reopened his 2002-03 assessment for evading tax.
A division bench of Justices S J Vazifdar and M S Sanklecha on July 5 heard the appeal against the IT appellate tribunal’s March 19, 2010 order, which held that the assessing officer (AO) was not justified in reopening the assessment.
On October 13, 2002, Amitabh Bachchan filed his return, declaring his income at Rs 14.99 crore. On March 31, 2003, he filed a revised return, wherein he claimed expenses at 30% ad hoc (without details to support), amounting to Rs 6.31 crore and determined his income at Rs 811 crore. However, before the assessment could be completed, on March 13, 2004, Bachchan withdrew the revised return along with the claim for deduction of 30% ad hoc expenses from his total income. On March 29, 2005, the AO completed the assessment and determined Bachchan’s income at Rs 56.41 crore. A notice was sent on April 5, 2006 for reopening assessment proceedings.
The actor had withdrawn the claim as he could not prove certain expenses. The AO also sought verification of cash journals, vehicle and professional expenses, books of accounts, receipts of dividend received from investment in a house property and source of cash deposits in an account, which included deposits on behalf of Jaya Bachchan. It noted that while Amitabh Bachchan maintained seven accounts, he furnished details of only six.
On December 31, 2007, the AO assessed the actor’s total income of Rs 20.05 crore after granting applicable relief under the IT Act.
Amitabh Bachchan moved the Commissioner of Income Tax (Appeals), which on March 4, 2009 set aside the reassessment, holding that the material on the basis of which the assessment was sought to be reopened was always available during the time of original proceedings. The tribunal department also upheld the CIT(A) order.
The judges said the CIT (A) and the tribunal “correctly concluded that there was no fresh tangible material” before the AO to believe that taxable income escaped assessment. Also, that reasons for re-assessment records that Bachchan withdrew his claim of 30 % percent when asked to substantiate it.