AR Rahman gets notice from Madras High Court for evading income tax on Rs 3.47 crore
Chennai: The Madras High Court on Friday issued notice to music composer A R Rahman on a petition filed by the Income Tax department alleging that he used a foundation in which he is the managing trustee as a conduit to evade tax and routed Rs three crore plus income to it.
The Income Tax Department moved the High Court challenging the ruling of the Income Tax Appellate Tribunal here that set aside the order of the Principal Commissioner of Income Tax in Chennai.
A division bench of justices TS Sivagnanam and V Bhavani Subbaroyan recorded the submissions made by the IT department and issued notice to the music composer.
According to senior standing counsel for the Income Tax department T R Senthil Kumar, in the assessment year 2011- 12, Rahman received income to the tune of Rs 3.47 crore in connection with an agreement made with the UK-based Libra Mobiles.
The contract was to compose exclusive ringtones for the company and the term of the contract was for three years.
As per the contract, Rahman instructed the company to pay his remuneration directly to the foundation managed by him, the department said.
"The taxable income must be received by Rahman and after due deduction of tax, it can be transferred to the trust. But the same cannot be routed through the trust as income to the charitable trust is exempted under the Income Tax Act," the counsel said.
According to the petition filed by the Income Tax department, Rahman after receiving the IT notice had moved the Income Tax Appellate Tribunal in Chennai and the tribunal in September 2019 had held that the government of India had accorded "post facto approval" with respect to this contribution.
The tribunal ruled in favour of Rahman finding that the amount was not taxable.
The petition said the order of the appellate tribunal is "erroneous in law" and opposed to facts and circumstances of the case.
Rahman had received Rs 3,47,77,200 from Libra Mobile during 2010-11 in his individiual capacity as an artiste which must have been considered for taxation and this was not considered by the Assessing Officer in the reassessment order.
The receipts by the trust are professional fees paid to the assessee for the services rendered by him.
However, the assessee has not admitted these professional receipts in his return of income for the assessment year 2011-12.
Instead of receiving the consideration as professional charges in his individual capacity, the assessee has got these payments diverted to A R Rahman Foundation which is registered as a tax-exempt entity under the Income Tax Act.
The amount that must have been received by Rahman as professional fee has been passed off as "donation" to the foundation.
The tribunal failed to consider that the assessee who is also the managing trustee of A R Rahman Foundation has used it as a "conduit" for accounting his own untaxed income, the plea said.
The Assessing Officer had not made any attempt to examine the various clauses of agreement nor tried to make enquiry to ascertain facts.
Also, the AO did not gather any material during the course of reassessment proceedings to come to the very same conclusion arrived at during the original assessment.
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Hospital wall collapse: CM orders suspension of executive engineer; kin of victims get solatium
Bengaluru (PTI): Karnataka Chief Minister Siddaramaiah on Thursday ordered the immediate suspension of an executive engineer for the Bowring and Lady Curzon Hospital wall collapse that claimed the lives of seven people, during a high-level review meeting at Vidhana Soudha.
A compensation of Rs 5 lakh, as announced by the CM Siddaramaiah, was distributed to the families of seven victims who lost their lives in the tragedy on Wednesday evening, which occurred due to heavy downpour with gusty winds and hailstorm.
The meeting of municipal commissioners of the five corporations, chaired by the chief minister and attended by Deputy Chief Minister D K Shivakumar, focused on fixing accountability and examining lapses that led to the tragedy.
"Why was soil dumped in a way that damaged the wall? Why did you not monitor this?" Siddaramaiah asked, pulling up hospital authorities during the meeting.
A statement from the chief minister's office said that the CM ordered the immediate suspension of the executive engineer of the Karnataka Health Systems Development Project (KHSDP).
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He also questioned the hospital authorities, asking why they failed to monitor the dumping of soil that weakened the structure.
The chief minister directed that a notice be issued to the head of the Hospital.
During the meeting, Siddaramaiah said the rains had caused extensive damage in the city, with over 250 trees uprooted.
The Chief Minister instructed officials to take necessary measures before the onset of the monsoon to avoid untoward incidents.
Commissioners of all five municipal zones in Bengaluru have been asked to take precautionary steps, including trimming dry and dangerous tree branches, the CMO said.
Siddaramaiah also directed them to get the silt cleared from stormwater drains to prevent flooding, and that immediate action be taken to remove debris and fallen branches from roads.
Further, he instructed that barricades be placed at underpasses where water stagnates and restricts public movement.
The Greater Bengaluru Authority (GBA) Chief Commissioner M Maheshwar Rao said in a statement that Shivajinagar MLA Rizwan Arshad distributed compensation cheques of Rs 5 lakh each to the families of the deceased on Thursday.
Seven people, including a six-year-old girl, were killed and seven others injured when the compound wall collapsed amid heavy rain, strong winds and a hailstorm on Wednesday evening.
Police said the victims, comprising three from Bengaluru, two from Kerala on a study tour and one each from Uttar Pradesh and Assam, had taken shelter near the wall when it suddenly gave way, trapping them under the debris.
The chief minister questioned officials over the dumping of soil near the wall despite knowing it could weaken the structure, and directed that a notice be issued to the head of Bowring Hospital.
Siddaramaiah, who had visited the spot soon after the incident along with senior officials, reviewed the situation and ordered a detailed probe into the collapse.
