Income-tax appellate tribunal’s Mumbai bench has ruled that Sushmita Sen need not pay tax on Rs 95 lakh that she received as compensation in 2003-04 from Coca Cola over claims of harassment by one of its employees.

According to Entertainment Times, the bench has ruled that the compensatory amount received by Sushmita is non-taxable as it is not income but a ‘capital receipt’.

The Main Hoon Na actor had signed a commercial contract with Coca Cola India worth Rs 1.5 crore to promote its products. However, the deal was terminated prematurely after Sushmita accused one of Coca Cola employees of sexual misconduct. But Sushmita called the termination “mala fide and dishonest” alleging that the soft drink giant was punishing her for speaking up.

She then sued the multi-national over its failure to provide her a safe workplace.

As a result, instead of the Rs 50 lakh as agreed in case of termination, she received Rs 1.45 crore from Coca Cola, of which she only offered Rs 50 lakh to the income-tax department, alleging that since the balance (Rs 95 lakh) was a compensation, it was not taxable.

Now, in an order dated November 14, other than making the amount she received as compensation tax free, the tribunal has also ordered to set aside the Rs 35 lakh penalty which was imposed on Sushmita for concealing her income, reports Entertainment Times.

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