Tax hearing put off

Mumbai: The Hindi film industry is waiting with bated breath to hear what the Income Tax Appellate Tribunal (ITAT) has to say about the tax exemption actor Aishwarya Rai sought, on income she earned as brand ambassador for the watch company, Longines, in 2002. The case that came up earlier this week, was adjourned to end-March.

Many other film personalities have sought similar tax exemptions on their endorsement deals, and await the ruling in Rai's case to assess their own liability. In 2006, Rai enjoyed exemption for a portion of her income generated through foreign exchange for stage shows, but failed to convince tax authorities about granting a similar exemption on the Longines contract. It was after this that she approached the ITAT.

In 2002-2003, Rai was appointed brand ambassador for India by Longines, with a contract worth just over Rs1 crore. In 2006, the assessing officer rejected Rai's submission for having a sum of Rs30 lakh -- about 30 per cent of her income earned from Longines -- to be exempted from taxes, and this was upheld by the appellate IT commissioner.

The IT commissioner, who heard Rai's appeal, held that Rai "was not entitled for tax exemption under 80 RR. The examples of Sachin Tendulkar, Saurav Ganguly, Yuvraj Singh as referred by the assessment officer that such personalities are doing advertisement for promoting a particular product of the sponsor ... and it cannot, he held that while promoting the same they are playing their natural game in which they have acclaimed popularity.

Rai is just promoting a particular product and this has nothing to do with her profession of acting."

When contacted, Rai's chartered accountant KC Jain's office informed DNA that they would revert on the issue, but did not do so till the time of going to pr