Sushmita Sen not liable to pay tax on compensation by soft drink firm in sexual harassment case

New Delhi: Former Miss Universe and Bollywood actor Sushmita Sen has got a huge relief from the Income Tax Appellate Tribunal (ITAT) . The Mumbai bench of ITAT withdrew the burden of income tax liability on her from the compensation paid by a multinational soft drink company in 2004. ITAT also set aside the penalty of Rs 35 lakh imposed on her for concealment of income.

The bench said that Commissioner of Income Tax has erred, in law and facts and circumstances of the case in considering the Capital receipt of Rs 95,00,000 as income liable to tax.

Notably, in 2003-04 Sen had recieved Rs 1.45 crore from a soft drink company over issues of sexual harassment leveled against a senior company executive by the actress. Sen had only disclosed the estimate for her contractual agreement (Rs 50 lakh), but concealed the compensation of Rs 95 lakh paid to her by the company.

ITAT in its judgement concluded, “...In our opinion, the said submissions are irrelevant in view of the fact that the additional compensation received by the assessee did not arise from the contractual terms at all and hence, do not require any further elaboration against the same.

“Against the aforesaid addition of Rs95 Lacs, the assessee has been saddled with penalty of Rs 31.35 Lacs u/s 271( 1)(c) vide order dated 15/03/2010. The same, upon confirmation by first appellate authority vide impugned order dated 27/03/2015, is under appeal before us. Since, we have allowed assessee’s appeal against quantum addition, the consequential penalty do not survive. Even otherwise, upon consideration of factual matrix, we are of the opinion that there was no concealment of income or furnishing of inaccurate particulars on the part of the assessee. It was the case where the assessee made certain claim which has not been accepted by the revenue. Viewed from any angle, the impugned penalty could not survive. The appeal stand allowed,” the order said.