Oopsie, the Taxman got Priyanka!

By Nichola

on January 25, 2018

So, here’s a blow of sorts for Priyanka Chopra. She has received something of a jolt from the Income Tax Appellate Tribunal (ITAT) after she lost the IT battle in the tribunal for a Rs.50 lakh cash payment case.

Hark back a good many years ago to 2011, when the Income Tax department had raided her residence. During the search operation, various incriminating documents were allegedly found which showed that the actress had purchased a studio for Rs.3.5 crore, of which amount she had paid Rs.50 lakh in cash.

The IT authorities had added the Rs.50 lakh cash as an undisclosed income of the famous actress. This fact had been verified by her mother, Dr Madhu Chopra, who stated, “Yes, I admit that based on the above-seized papers, I under-disclosed the income which includes the cash payment made to purchase the studio of Rs.50 lakh. I also state that this income has accrued to me and Priyanka Chopra through various events, shows and sale of flats.”
Post this, the income tax department prepared a detailed statement and confronted the actress who also agreed to the statement.

However, things took a different turn when later that year, on April 13, Priyanka Chopra’s mother retracted the above-said statement. The Income Tax authorities however, went ahead and made the additions of Rs.50 lakh as the undisclosed income of the assessee. On receiving the demand notice from the IT officer, Priyanka filed an appeal against the order with the Commissioner of Income-tax. Things seemed to be going in her favour, as the Commissioner set aside the order of the Income Tax department, stating that there was no documentary evidence to prove that the income had been accrued to the actress. However, it didn’t end there. After receiving the rejection from the Commissioner (Appeals), the tax department filed the appeal with the higher authority i.e. ITAT against the order of the Commissioner (Appeals)!

ITAT came out to state that since Madhu Chopra had separately accepted the additions, it could not be said that this addition was not based upon any incriminating material found or searched. It was also stated that the so-called retraction was by the mother of the assessee and the Assessing Officer was correct in finding that there was no retraction whatsoever by the assessee.

The final statement: the addition made by the assessing officer was perfectly correct and there was an undisclosed income of Rs.50 lakh.

Incidentally, the actress has also been ordered to pay taxes on a luxury watch and a luxury sedan which, she claims, were gifted to her by the respective companies, and were not a part of her professional income. While the watch has been valued at Rs.40 lakh, the car is priced at Rs.27 lakhs.