Shah Rukh Khan And Juhi Chawla Got RELIEF From Bombay High Court From Income Tax Notice
Shah Rukh Khan and Juhi Chawla would be relived after Bombay High Court stayed the show-cause notices issued by the Income Tax Department. The IT department had issued show-cause notices to SRK and Juhi over alleged undervaluation of shares.
A bench of Justices MS Sanklecha and RI Chagla passed an interim order passed on last Friday, said that the IT Department’s notice was prima facie not based on any concrete evidence or finding.
Back in March 2017, the Income Tax Department had issued notices to Knight Riders Sports Pvt Ltd (KRSPL) and Shah Rukh Khan, Gauri Khan, and Juhi Chawla.
According to the IT Notice, KRSPL issued 5 million shares to a firm in Mauritius and 4 million shares to Juhi Chawla. These shares were issued at the price of Rs. 10 each, whereas the actual value of these shares was much more. The IT department claimed that Juhi Chawla also sold her shares to the same firm in Mauritius for Rs. 10 each.
This means that the foreign company in Mauritius was issued 9 million shares in total at par value, whereas actual value of the share at that time was approx Rs. 86-99 per share. This resulted in the loss of foreign exchange up to Rs. 735 million.
The Bench noted that an assessing officer of the IT department had already looked at the same allegation back in 2013 and he closed the case after being satisfied.
However, the Income Tax Department issued fresh notices and reopened the case.
The bench said, “The asessing officer being satisfied with the valuation of shares, submitted by the assessee, did not seek any further information. Therefore, when on the same basis, without any reasons in support of the reopening, the notice proceeds, it prima facie appears merely to be change of opinion,”
The bench further added,
“We are of the view that the reasons in support of the impugned notice, prima facie, proceed on a change of opinion and, therefore, prima facie, lacks jurisdiction,”
