Shah Rukh Khan and Priyanka Chopra perform at an event in Durban to mark the 150th anniversary of the arrival of Indians in South Africa. (AFP)

Mumbai, Jan. 10 (PTI): Shah Rukh Khan has been asked to pay tax on a Rs 17.84-crore villa in the UAE gifted to him in 2008 but the actor has contested the income tax department’s directive saying it cannot be construed as income from his business or profession.

The 45-year-old actor received the villa as a gift from a Dubai-based company during the assessment year 2008-09, which income tax sources said was in return for plugging a real estate project.

In April 2009, Shah Rukh had filed returns declaring an income of Rs 126.31 crore in the assessment year 2008-09. He had said his income was from his house, property, profession, capital gains and other sources.

 

The actor had included the 8,500sqft two-storey six-bedroom themed signature villa in the returns. The villa is part of The Palm, Jumeirah, and was gifted to him by Nakheel Public Joint Stock Company (NPJSC) on September 16, 2007, the sources said.

According to the department, the villa received by the actor under a gift deed was taxable and a notice was issued to him on November 26, 2010.

However, Shah Rukh said the gift did not constitute income from business or profession. The company also submitted a letter to the income tax department in October 2010, stating that the actor had not provided any professional services, the sources said.

NPJSC further clarified that the actor had attended the annual day function as a gesture of friendship towards executive chairperson Sultan Ahmed Bin Sulayem.

However, the tax department issued another notice on December 27 stating that NPJSC was using the brand name of Shah Rukh for endorsing its Palm Project since 2004 on its official website and in electronic and print media.

It said the actor did not show any receipts for the endorsement and argued that for other endorsements, he was charging huge amounts.

The department said an arrangement of business or transaction without putting it in writing and in good faith would under any circumstances be a business or transaction resulting in income/loss.

Shah Rukh was not available for comment.