A notice has been issued by the Madras High Court to music composer A R Rahman on an appeal filed by Principal Commissioner of Income Tax, Chennai. The appeal was filed against an order of the Income Tax Appellate Tribunal which was delivered in favour of Rahman. The notice was issued by a Division Bench of Justices TS Sivagnanam and Bhavani Subbaroyan.
It was alleged in the appeal that Rahman had evaded tax on an amount of Rs 3.47 crores which he had received as remuneration his services as music composer in 2010-11. He had reportedly composed ringtones for a UK-based music company. It was further contended that the Oscar-winning music composer had routed the said amount to his charitable foundation called A R Rahman Foundation which is exempted from tax under the Income Tax Act.
Rahman had entered into a three-year collaboration agreement with the company and had received an amount of US $7,50,000 (Rs 3,47,77,200) as professional fees in his individual capacity as an artist. The IT Department had contended that this must be received by Rahman in his account and is liable to taxed. After deducting the income tax. it can be transferred to the charitable trust. Evidence were produced by the Assessing Officer of his Foundation to show that the said donationzs received by the Foundation were due to Rahman.