I-T dept drags Aishwariya rai to court!!

She may have won over the world but didn't succeed with the taxmen. A decade-old claim of being a non-resident Indian during her tax asses
sment has come back to haunt Aishwarya Rai, the big screen diva whose latest film fee is reportedly about Rs 6 crore.

The income-tax commissioner , central-I , has dragged the actor to the Bombay high court against her claim that her Miss World income of 50,000 pounds was non-taxable as she was a non-resident Indian. On Monday, the actor, through her counsel Percy Pardiwalla, opposed the commissioner's appeal , but a bench headed by Justice S Radhakrishnan thought it fit to admit it.

The Bachchan bahu, who was then at the beginning of her career, had, in her income-tax returns for the assessment year 1996-97 , declared a total income of Rs 2.14 lakh. But in 2000, during a search and seizure on her premises, the I-T department found that her passport showed her to be a resident as against her claim of being a non-resident Indian during the assessment year. She was out of India for only 92 days and not for 186 days as she "falsely claimed'' , said the taxman and three years later in 2003 reopened the proceedings against her under the Income Tax Act.

In 2004, the I-T authorities ordered that the income of 50,000 pounds(equivalent to approx Rs 26 lakh) she had received for winning the Miss World contest must be added to her income and taxed accordingly. The tax amount was approximately Rs 14 lakh which, the IT officers say, with interest, should now amount to almost Rs 50 lakh due to the department.

Rai challenged the 2004 order and got partial relief that November. But she filed another appeal before the Income Tax Appellate Tribunal (ITAT), challenging the department's power and move to reopen her assessment. The ITAT had in October 2007 ruled in her favour, deleting the addition of her Miss World pageant income from her 'block assessment proceedings'i.

But Rai's million dollar smile would have turned into a pout soon as P R Sethi, commissioner of income tax, Central-I decided to appeal the ITAT order. His counsel Beni Chatterjee informed the court that she had never produced the passport before the assessing officer and that it was only during the search operation that her real status was discovered.

Pardiwalla, however, stressed the point that it was not open for the I-T department to reopen her assessment years later and that too without a proper notice or hearing her. He also read out the ITAT order to show that the passport had been produced before the assessment officer. Refuting the claim, Chatterjee produced the officer's order.

The dispute is not about the actor not having made a true disclosure of her prize money but only about her "false claim' ' about its taxability, said the I-T commissioner in his appeal. He added that the ITAT had, in fact, failed to realise that the reason the assessment was reopened was because the actor had not disclosed her true residential status as required under the Income-Tax Act.