Income tax department issues notice to A.R.Rahman of routing income to his foundation
The Chennai High Court has issued a notice to music composer AR Rahman on tax evasion, which has caused a stir in the Kollywood community. AR Rahman has been contracted to set the ring tone for Libra Mobiles in the UK. It is said that he had received a salary of Rs 3.47 crores and as per the contract, Rahman had instructed the company to pay his remuneration directly to the foundation managed by him. The I-T Department challenged the Income Tax Appellate Tribunal’s September 2019 verdict setting aside the order of the Principal Commissioner of Income Tax in Chennai. The Principal Commissioner of Income Tax in Chennai had alleged that the composer had diverted money to his foundation. The department has reportedly pegged the amount of income routed to about Rs 3 crore.The Madras High Court on Friday sent a notice to AR Rahman to explain the charges levelled by the Income Tax Department.
The Income Tax Department has filed a case in the High Court alleging tax evasion as he transferred such a large amount of money from abroad to his trust account without paying due tax. Currently, the High Court has sent a notice to the Oscar winner regarding this case.According to T R Senthil Kumar, the senior standing counsel for the income tax department, the Oscar-winning music composer received an income of Rs 3.47 crore in the financial year 2011-12 for composing exclusive ringtones for a UK based telecom company. The contract lasted for three-years where Rahman asked the company to make the payment directly to his charitable trust, AR Rahman Foundation.
The income tax department has moved the Madras High court alleging that Oscar-winning music composer A.R.Rahman has routed his income of over Rs.3.47 crore through A.R.Rahman foundation a charitable trust managed by him to evade tax.According to a popular media which quoted the IT Department counsel who said, “The income which is taxable must be received by Rahman. After due deduction of tax, it can be transferred to the trust. But the same cannot be routed through the trust as income to the charitable trust is exempted under the Income Tax Act.”
The Academy award winning music director filed an affidavit in the court stating the Commissioner initiated action with the notion that producers are copyright owners of a song. However, composers are the copyright owners as per Section 13 (1) (a) of the Copyright Act 1957.