Aishwarya Rai's exemplary behaviour in heeding her conscience and returning the signed-up amount, paid to her by UTV for ‘Heroine', is unlikely to win her any sympathies from the Income-Tax Department. The Supreme Court in CIT vs. Ogale Glass Works Ltd (1954) 15 ITR 529 had held that where payment was made to the assessee by a cheque, and the cheque on presentation was not dishonoured, it relates back to the date of receipt. The fact of receipt of the amount, in any case, is not in doubt, which means that the amount will figure as her income for the relevant previous year. I-T RELIEF Surrender of salary usually does not get any relief for an employee. Likewise, return of fees by a professional, does not beget one any relief either. It is certainly not diversion of income by an overriding title, but only an application of income after it has been earned, and in this case, furthermore, received, as clearly held by the Supreme Court eons ago, in the famous Sithaldas Tirathdas case. When an income or a part thereof is diverted before it is earned through an overriding title, it is called a ‘charge' on such income, and hence not taxable in the hands of its earner, whereas when there is no such charge, that is, binding obligation charged on the income, it is very much taxable in the hands of the earner.
Source : http://www.thehindubusinessline.com/opinion/columns/s-murlidharan/article2439792.ece?homepage=true
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