Mar 10, Kathmandu- Bollywood superstar Shah Rukh Khan has scored a major victory in an income tax case. The Income Tax Appellate Tribunal of India has stayed the revaluation proceedings initiated by the Income Tax Department for the financial year 2011-12.

The case relates to the UK tax credit paid on the earnings of the film ‘Raavan’. As per the agreement between Shah Rukh and Red Chillies Entertainment, 70 per cent of the film was to be shot in the UK. Therefore, 70 per cent of the earnings were deemed to have been earned abroad, which was subject to UK tax. This also included withholding tax.

Khan had announced an income of Rs 83.42 crore from this film. His claim for tax credit paid in the UK was rejected by the tax authorities. The revaluation of income was done at Rs 84.17 crore. This reassessment was done more than four years after the end of the relevant assessment year (2012-13).

Khan had claimed foreign tax credits in his original income tax return, which were rejected by the income tax authorities.

But now the Income Tax Appellate Tribunal has stayed the proceedings against Shah Rukh Khan after finding no evidence, Indian media reported.

Shah Rukh Khan was paid through a British company, Winford Productions. Tax authorities had argued that the payment arrangement had caused India to lose revenue.

An Indian citizen has to pay tax in India on his worldwide income. The tax law provides for foreign tax credit. This allows Indian citizens to deduct tax paid abroad from their Indian tax liability. This helps in avoiding paying tax twice on the same income.