How did the Income Tax Department calculate the disallowance for Aishwarya Rai Bachchan?

The dispute centered on Section 14A of the Income-tax Act, which restricts deductions for expenses incurred to earn tax-free income. The Assessing Officer rejected Aishwarya's calculation and applied Rule 8D, resulting in a disallowance of Rs 4.60 crore.

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Bollywood Star Aishwarya Rai Triumphs Over Income Tax Department

Q: What was the tax dispute between Aishwarya Rai Bachchan and the Income Tax Department?

Aishwarya Rai Bachchan, the renowned Bollywood actress, won a major legal victory in her tax dispute with the Income Tax Appellate Tribunal (ITAT) Mumbai. The tribunal deleted a Rs 4 crore disallowance raised by the income tax department for the 2022-23 assessment year.

Q: Why did the ITAT rule in favor of Aishwarya Rai Bachchan?

The ITAT found that the Assessing Officer had not properly considered the facts or provided adequate reasoning for the disallowance. The tribunal emphasized that the officer had simply rejected Aishwarya's calculation without separating the investments that actually earned exempt income, and the disallowance of Rs 4.60 crore was unreasonable.

6 Nov

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Summary

Aishwarya Rai Bachchan wins tax dispute with income tax department
Tribunal deletes Rs 4 crore disallowance for Assessment Year 2022-23
Dispute centered on tax-free income expenses under Section 14A

Bollywood Star Aishwarya Rai Triumphs Over Income Tax Department

In a significant legal victory, Bollywood star Aishwarya Rai Bachchan has prevailed in her tax dispute with the Income Tax Appellate Tribunal (ITAT) Mumbai. The tribunal has ruled in her favor, deleting a Rs 4 crore disallowance raised by the income tax department for the 2022-23 assessment year.

The dispute centered on Section 14A of the Income-tax Act, which restricts deductions for expenses incurred to earn tax-free income. Aishwarya had declared a total income of Rs 39.33 crore for the year, including Rs 2.14 crore from tax-free investments. She made a voluntary disallowance of Rs 49.08 lakh, but the Assessing Officer rejected her calculation and applied Rule 8D, resulting in a disallowance of Rs 4.60 crore.

However, the ITAT found that the Assessing Officer had not properly considered the facts or provided adequate reasoning for the disallowance. The tribunal emphasized that the officer had simply rejected Aishwarya's calculation without separating the investments that actually earned exempt income. Ultimately, the ITAT ruled that the disallowance made by the Assessing Officer over and above Aishwarya's voluntary disallowance was "without any basis" and deserved to be deleted.

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