TDS dispute | Actor Sivakarthikeyan receives refund of ₹12.60 lakh from I-T Department

Actor D. Sivakarthikeyan recently succeeded in getting a refund of ₹12.60 lakh from the Income Tax department. The Madras High Court disposed of a writ petition filed by him in 2022, after recording the submission of the Department that the amount had been deposited in his bank account.

In his affidavit, the actor had stated that he had entered into a written agreement with Aadnah Arts, represented by its sole proprietor K.E. Gnanavelraja, on July 6, 2018 to perform the male lead role in a movie for a total consideration of ₹15 crore apart from the Goods and Services Tax (GST) in actuals.

Gnanavelraja accuses Sivakarthikeyan of suppressing facts

As per the document, the actor’s remuneration of ₹2 crore was to be paid on or before the signing of the agreement. Another ₹1 crore was to be paid on or before commencement of the shooting, ₹7 crore during 70 days of the call sheet at the rate of ₹1 crore after every 10 days of shooting, and ₹ 2 crore before completion of the dubbing work.

Further, ₹2 crore was to be be paid before the audio release of the movie and the final tranche of ₹1 crore was to be paid before its theatrical release. The producer also agreed to pay the GST at the applicable rates besides paying the remuneration to the actor only after deducting the tax at source (TDS) and remitting this to the I-T Department.

However, in the assessment year 2019-20, a TDS mismatch of ₹65.50 lakh was found on account of Mr. Gnanavelraja not having remitted the TDS with the Department. Similarly, another TDS mismatch of ₹1.11 lakh was found in the assessment year 2020-21 on account of the producer not having remitted the amount, the actor complained.

This non-remittance by the producer had resulted in the I-T Department recovering 91.16 lakh from the actor’s bank account in February 2022, he said, and sought a direction for the refund of the money. While the case was pending adjudication, the issue was resolved between the parties with the producer remitting all necessary payments.

Finally, when the case was listed for hearing before Justice Krishnan Ramasamy in December 2023, it was reported that the I-T department had to refund only ₹12.60 lakh with interest and even this amount had been deposited into the actor’s bank account.

The judge closed the writ petition after recording the submission made by the I-T Department counsel.