Desi girl Priyanka Chopra has attracted trouble from the Income Tax department over a luxury watch and a car, both which the actress claims has been gifted to her. PeeCee explained to the Income Tax Appellate Tribunal (ITAT) that the luxury items were gifts, however, the ITAT has refused to accept them as gifts and asked the actor to pay tax for it.
The IT department claims that under section 28(iv) of the Income-tax (I-T) Act the Rs 40 lakh LVMH-TAG watch and the Toyata Prius that costs Rs 27 lakh are taxable perquisites. The section considers taxable the ‘value of any benefit or perquisite (whether convertible into money or not), arising from business or exercise of profession.'
During an I-T raid in 2007-08, an I-T official observed that apart from a payment of Rs 1.40 crore for modelling and promotional activities over a two-year period, Chopra was also gifted a watch worth Rs 40 lakh from the luxury brand LVMH-TAG watches. When the actress protested that it was a gift given out of love and respect, the official said, "A company, is an artificial person and therefore does not have any emotional feeling of love and affection which is the cardinal factors for treating any transaction as gift." This decision was upheld by the Commissioner (Appeals), which is the first step of appeal that the actor has to go through. When Piggy Chops approached the ITAI, her argument was denied.
Also, in the year 2009-10, the ITAT observed that the Rs 27 lakh Toyota Prius hybrid luxury sedan, which was given to Chopra for being the brand ambassador of a campaign, will also be a taxable perquisite.
These are only two of the items that the ITAT has upheld as taxable. Other taxable items are a payment of Rs 11.45 lakh from London Speaker Bureau, Rs 50 lakh as undisclosed income, which Priyanka used to pay for Studio Aesthetique, Rs 10 lakh she paid to clear hindrances on a Bandra property and Rs 6 lakh as undisclosed cash.Read More