The Income-Tax Appellate Tribunal (ITAT) gave Shilpa Shetty a major relief when it recently struck down an addition of Rs. 5.4 crore to her income for financial year 2010-11. The actress had declared a taxable income of Rs. 7.6 crore but the I-T authorities added Rs. 5.4 crore to it as ‘transfer pricing’ adjustment.
The authorities computed a notional sum of Rs. 5.4 crore as a fair price that Shilpa ought to have charged for acting as the brand ambassador of husband Raj Kundra’s IPL cricket team, Rajasthan Royals. She had not shown any income for her services involving personal appÂearances, photo shoots and press interviews. The department computed a notioÂnal income of Rs. 5.4 crore as a fair price that ought to have been charged by her.
The Income-tax officer added the notional income which the CIT (Appeals) upheld. The ITAT, however, quashed the order of the CIT (A) following a precedent set by its own order for financial year 2009-10.