Shah Rukh Khan Prevails in Tax Dispute as ITAT Dismisses Case Over RA.One Earnings

Ziya Khan 3 weeks agoLast Updated: March 10, 2025

Shah Rukh Khan has achieved a significant victory in a long-standing tax dispute, with the Income Tax Appellate Tribunal (ITAT) ruling in his favor. The tribunal recently quashed the reassessment proceedings initiated by the Income Tax authorities for the financial year 2011-12.

Background of the Tax Case

The case centers on Shah Rukh Khan’s earnings from his 2011 film RA.One, produced under his banner, Red Chillies Entertainment. According to the agreement, 70% of the filming took place in the UK, which meant that a considerable portion of his remuneration—estimated at Rs 83.42 crores—was subject to UK taxes, including withholding tax. Khan declared this income in his original tax return for the Assessment Year 2012-13, claiming a Foreign Tax Credit (FTC) to offset the taxes paid abroad against his Indian tax liability.

However, the Income Tax officer rejected Khan’s FTC claim and reassessed his income at Rs 84.17 crore, alleging underpayment of tax. This reassessment was initiated beyond the four-year statutory limit outlined in Section 147 of the Income Tax Act, leading to a protracted legal battle that has now concluded favorably for Khan.

ITAT’s Ruling: A Triumph for Shah Rukh Khan

The ITAT bench, consisting of Sandeep Singh Karhail and Girish Agrawal, ruled that the reassessment proceedings were invalid. The tribunal stated that the assessing officer failed to present “fresh tangible material” to justify reopening the case after the statutory deadline. Additionally, the bench highlighted that Khan had fully disclosed his foreign income and tax credits in his original filing, which had already undergone scrutiny under Section 143(3).

This made the reassessment a case of “mere change of opinion,” rendering it legally unjustified. As of March 10, 2025, Shah Rukh Khan has not publicly commented on the ruling. On the professional front, he was last seen in Dunki, a 2023 release directed by Rajkumar Hirani, which also features Taapsee Pannu. Next, Khan is set to appear in Siddharth Anand’s King.