Shah Rukh Khan Wins Tax Battle, ITAT Overturns Reassessment Proceedings: Details Inside
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Shah Rukh Khan won a tax dispute as the Income Tax Appellate Tribunal ruled in his favor, scrapping the reassessment order for 2011-2012 over foreign tax credit claims from RA.One.
Shah Rukh Khan wins tax dispute case.
Shah Rukh Khan has scored a big win in a long-standing tax case. The Income Tax Appellate Tribunal (ITAT) has ruled in his favour, scrapping the reassessment order issued by tax officials for the 2011-2012 financial year. This decision marks a major relief for the superstar, putting an end to the dispute.
According to The Times of India, the Income Tax Appellate Tribunal (ITAT) has set aside the reassessment proceedings, ruling in favour of Shah Rukh Khan in the tax dispute.
Shah Rukh Khan found himself in a tax dispute after officials questioned his declared income of Rs 83.42 crore, particularly rejecting his claim for foreign tax credit on taxes paid in the UK. As a result, his income was reassessed at a higher Rs 84.17 crore. This reassessment came over four years after the conclusion of the relevant assessment year (2012-13), leading to the legal battle.
The ITAT bench ruled that the income-tax department’s reassessment of Shah Rukh Khan’s case was not legally justified, marking a crucial win for the actor in his prolonged dispute over foreign tax credit claims. The case stemmed from the taxation of his earnings from the 2011 film RA.One, which had been at the centre of the litigation.
As per the report, Shah Rukh Khan had an agreement with Red Chillies Entertainments—his co-founded production company—stating that 70 per cent of RA.One would be filmed in the UK. This meant that a corresponding portion of the film’s income was classified as overseas earnings, making it subject to UK taxes, including withholding tax. His remuneration for the project was routed through Winford Production, a UK-based entity. However, Indian tax authorities argued that this payment structure resulted in a revenue loss for India, leading to the dispute.
The ITAT bench, comprising Sandeep Singh Karhail and Girish Agrawal, ruled that the reassessment proceedings against Shah Rukh Khan were invalid. The judges noted that the assessing officer had not presented any “fresh tangible material” to justify reopening the case beyond the four-year statutory limit. They also pointed out that the issue had already been examined during the initial scrutiny assessment. Concluding that the reassessment was flawed on multiple grounds, the bench deemed the proceedings legally untenable.
Shah Rukh Khan is currently gearing up for his next film, King, which will also feature his daughter, Suhana Khan. The project is set to begin filming in March 2025, with a global release planned for 2026.
