ITAT Mumbai Confirms Income Tax liability of Actor Hrithik Roshan towards the Amount on Promoting Film [Read Order]

In a recent ruling, the Income Tax Appellate Tribunal, Mumbai bench confirmed the levy of income tax on the renowned Bollywood actor Hrithik Roshan and observed that the amount spent by him towards the promotion of his film is taxable under the Income Tax Act. The Appellate Tribunal upheld the contention of the Department that the expenditure has no nexus with the profession of the actor.

Coming to the facts of the case, the actor claimed expenditure in respect of the amount spent by him while promoting the film “Guzarish”. According to him, the amounts were paid to seven contestants of a television show namely “Saregama” for promoting his brand, he being the main lead artist of the film. Both the Assessing Officer and the first appellate authority rejected the claim.

Before the Tribunal, the Department contended that the assessee in terms of the contract with the producer was not required to incur such expenditure, however, for promoting his brand and the movie, the success of which would also enhance the brand value of the assessee, the expenditure was incurred for encouraging the participants of the television show.

Upholding the order, the Tribunal observed that “Undisputedly, the assessee is neither the producer nor the financer of the film “Gujarish”. He has only acted in the film for a remuneration / fee. Therefore, it is neither his responsibility nor obligation to incur expenditure for promotion of the film. It has also been fairly accepted by the learned Authorised Representative that the terms of the contract do not require the assessee to incur such expenditure. There is nothing on record to also suggest that there is any contract with the T.V. channel to incur such expenditure. Therefore, if as an observer of the TV show, assessee decides to give some cash gifts to the participants for encouraging them, it is voluntary and spontaneous act of the assessee and has nothing to do with the promotion of the feature film or in any way connected to his profession.”

Read the full text of the order below.