Dubai Villa gifted to Shah Rukh Khan not taxable as his professional receipt: Mumbai ITAT

Facts :

a) Shahrukh Khan (SRK) received Signature Villa as gift from a Dubai based public joint stock company. Assessing Officer (AO) was of opinion that said villa was assessable as 'professional receipt' being covered under Section 28(iv).

b) SRK had denied rendering any professional services and attributed the receipt of villa to simply a unilateral gratuitous act of gift by Dubai based Company on its Annual Day on account of natural love and affection which wasn’t taxable.

c) CIT(A) held in favour of SRK. Aggrieved-revenue filed the instant appeal before the tribunal.

Tribunal held in favour of assessee as under :

1) Mr. Shah Rukh Khan was one of the guest honour on the occasion of Annual day celebration of Donor-Company. He was under no obligation to attend such function and undertake any sort of brand endorsements.

2) Mere fact that he had attended annual day celebrations and addressed employees of said company, it could not be concluded that he had indulged in brand endorsement for Donor Company.

3) Further, gift received in kind had been brought to tax w.e.f. 01/10/2009 under section 56(2)(vii)(b). Earlier, only money received as gift in excess of Rs. 50,000 could be brought to tax vide Section 56(2)(vii)(a).

4) This case pertained to AY 2008-09 wherein old provision was applicable. Therefore, Signature Villa received as gift by SRK couldn’t be said to be out of exercise of profession and, thus, not taxable. - [2017] 84 taxmann.com 209 (Mumbai - Trib.)