Going into details, for two of her acquisitions – a luxury watch worth Rs 40 lakhs and a Toyota Prius car worth Rs 27 lakhs, PC hasn’t been paying taxes for the past four years. When she got scrutinized by the IT sleuths in this regard, she reportedly claimed that the aforementioned possessions were ‘gifts’ presented by the respected manufacturers out of love and respect for endorsing their products. Stating that she did not buy them with her income, she argued that the items were not taxable.
When the issue reached the Income-tax Appellate Tribunal (ITAT), the body disagreed with PC’s explanation and said, “A company is an artificial person and therefore does not have any emotional feeling of love and affection which is the cardinal factors for treating any transaction as gift.”
And, the ITAT ruled that both items would be treated as taxable perquisites, and directed the ‘Baywatch’ actress to pay taxes.
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