Sushmita Sen case- capital receipt not liable for taxation.
Mumbai, Nov 19 (PTI) The Income Tax Appellate Tribunal (ITAT) passed
an order. In the favour of Sushmita Sen. Ruling the Rs 95 lakh that the
actor received from beverages maker CocaCola for
settling a sexual
harassment complaint. This would not classified as an ‘income’.
According to a November 14 order. The tribunal accepted the
contention that the sum of “capital gain” is not an income which liable
for tax. It also did away with a penalty of Rs. 31.35 lakh that was slap
on her for concealment of this “income”.
The case pertains to a Rs 1.50 crore contract between CocaCola and
Sushmita Sen which is end in 2003. She had received a sum of Rs 1.45
crore from CocaCola for the final settlement.
In her tax filings, the she showed only Rs 50 lakh as “income”. And
the rest as extra receipts which are capital gains in nature.
“The only logical deduction was that the company accepted the
contention of the assessee of the alleged sexual harassment and paid the
compensation to avoid negative publicity/embarrassment which would have
jeopardized the business of the company world over,” the order said.
“The additional compensation was not towards the service render and do not arise out of the contractual terms,” it adds.
Giving more details, the order said Sen allege the termination done
for “collateral and illegal purpose of punishing the assessee for
resisting attempts of sexual harassment” by an employee of CCIL (Coca
Cola India).
Accepting Sen’s contention, the tribunal at the final settlement of
Rs 1.45 crore is “not a simple settlement of commercial claims”. And
only Rs 50 lakh was the ‘income’ due to her from the beverage maker.
“The said compensation do not accrue / arise out of exercise of
profession by the assessee and could not be construed to be the income
of the assessee or profits and gains of profession…we have no hesitation
in deleting the impugned addition of Rs 95 lakh,” it said. PTI AA RSY
AAR