Harshvardhan Nawathe, who was the very first winner on TV quiz show Kaun Banega Crorepati (KBC), gets a tax relief as the Income Tax (I-T) Department recently withdrew its appeal in Bombay High Court against the order of the ITAT which had waived off tax liability calculated at 40 per cent on the Rs 1 crore winning amount.
The withdrawal was on the basis of departmental circular issued in the year 2015 which directs the officials to withdraw appeals wherein the tax effect is less than Rs 20 lakhs. The tax effect involved in the present appeal is less than Rs 20 lakh. the circular was issued with a view to reduce pending litigation of the revenue department. Prior to 2015, the tax effect benefit was upto Rs 10 lakh.
Nawathe became the very first person to win the Rs 1 crore jackpot on KBC, which is hosted by actor Amitabh Bachchan in the year 2000. He had clubbed his winnings with his regular earnings for 2000-2001. He had paid Rs 35 lakh towards tax. However, the winning amount should have been calculated under Section 115BB of the Income Tax Act, which was not done, by him. Section 115bb of the Act states that winnings from lotteries, puzzles or racing have to be taxed at 40 per cent.
On appeal, the ITAT held in favour of the assessee. Against the order, the department moved to High Court in 2009 claiming the tribunal had wrongly waived off Nawathe’s tax liability of about 40 per cent on the winnings, as declared in the returns filed for assessment year 2000-2001.
Read the full text of the Order below.
