Mumbai, Mar 28: The Bombay High Court will decide whether Rs 17.74 crore paid by Amitabh Bachchan Corporation Ltd (ABCL) to the superstar Amitabh Bachchan and his wife Jaya Bachchan for their services was revenue or capital expenditure.
While the IT authorities filed an appeal challenging an order of Income Tax Appellate Tribunal which claimed that Rs 17.74 crore paid to the actors was a capital expenditure and hence taxable.
The IT counsel informed a division bench of Justice DY Chandrachud and Justice MS Sanklecha that the company had acquired a brand by making the payment. “It is a new means of access to income. This payment is hence capital expenditure,” the appeal asserted.
In 1995, the ABCL had filed returns showing a loss of Rs 17,74,85,826, on the grounds that the money paid was according to the agreement signed between the company and Amitabh's family. Of this amount, the company paid Rs 15 crore to Amitabh Bachchan and Rs 3 crore to Jaya Bachchan.
Bachchan family had allowed the company to use their names for various purposes and agreed to make themselves available to the company for a time period of 120 days in a year, for 10 years.