SC to decide if fashion designers are artists

The Supreme Court today agreed to look into the issue of whether the fashion designers are artists or not to claim exemption under the relevant clause of Income Tax Act while filing their returns.

The Apex court today issued notice to fashion designer Tarun Tahiliani over a petition filed by the Income Tax department challenging the orders of the Bombay High Court, which had said that he was an artist and could claim exemption under the section 80 of the Income Tax Act.

A three judge bench headed by the Chief Justice S H Kapadia issued notice to the fashion designer and directed to tag it along with other similar matter against him.

Earlier, the apex court had issued notice to the fashion designer in January 21, 2011, on an earlier petition filed by the IT department. Now both will be heard together.

On June 14, 2010, a division bench of the high court had dismissed the appeal filed by the IT department challenging the orders of the Income Tax Appellate Tribunal (ITAT).

Tahiliani had sought deduction of the income earned through foreign assignments under section 80 of the Income Tax Act. He had earned over Rs 80 lakh in the year 2000 from foreign countries.

Section 80 refers to Indian authors, playwrights, artists, musicians, sportsmen and actors who receive income from foreign countries.

Under the said section, 75% of the total income is exempted from tax.

However, the IT department denied him the exemption and the matter went to ITAT, which upheld Tahiliani's contention. Following this, the IT Department had filed an appeal in the High Court, but it was dismissed.