Mayawati Triumphs in Tribunal
WITH boring regularity, the Hon'ble Chief Minister of Uttar Pradesh, Madam Mayawati gets Crores of Rupees as gifts/donation on her birthdays. And with equally boring regularity, the Income Tax Department tries to bring these donations under the tax net, but ultimately it is Mayawati who smiles all the way to the bank. The ITAT had been confronted with this issue at least on three occasions and on all the three occasions, she had won hands down.
In the latest case, the AO tried to tax the donations as professional income as her profession was politics. But the Tribunal held that she had a dual personality, one as a BSP Leader - politician and one in her personal capacity.
The Tribunal held, “Income tax Act recognizes dual capacities of any assessee i.e. to acquire non taxable personal/capital receipts and taxable receipts, assessee in this case cannot be treated as an exception to this proposition. Revenues emphasis is to the effect that the assesses persona is inextricably linked with her politics therefore whatever she receives amounts to vocational receipts. In our view this view militates against the basic scheme of the income tax Act which prescribes that any person can have nontaxable receipts including gifts. Therefore, merely because assessee is in politics, Member Parliament and President BSP will not deprive her of ordinary treatment under income tax law. It cannot be held that her identification with politics or BSP is so total that she can no more have any personal identity”
Some 35 years ago the Supreme Court had held that politics is a profession – but more on that some other time.
We will bring you the ITAT order tomorrow.