Quick Summary
In 26 June 2016, Bollywood actor Preity G Zinta filed income tax return as a "non-resident individual" with declared an income of Rs.46 lakh. On 31 March 2022, the Assessing Officer issued a draft assessment increasing her total assessed income to around Rs.11 crore. In response to this draft asses
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Preity Zinta was issued a draft assessment order that increased her total assessed income to around Rs 11 crore, with a specific addition of Rs 10 crore under Section 68 as unexplained cash credit due to large credit and debit entries in her bank account.
She explained that the transactions related to repaying loans taken from a private company between 2012-2014, for which her Quantum Park flat was mortgaged. The sale proceeds of the flat and inter-entity transfers within the 'Merchant group' were routed through her account.
Preity Zinta provided loan-history documents, sale deed, capital-gains computation, detailed bank statements, transaction-wise ledger entries, and tax-audit disclosures to prove the identity, creditworthiness, and genuineness of the transactions.
The ITAT Mumbai accepted Preity Zinta's explanation, held that the transactions were genuine, and deleted the Rs 10 crore addition made by the tax officers, ruling the reassessment unjustified.
The ITAT's order effectively gave Preity Zinta a complete clean chit on the tax issues related to this case, confirming that she did not derive any new benefit but merely transferred liabilities.
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