The sports star had moved the apex court challenging the High Court's verdict refusing his claim for Rs 28.5 lakh tax exemption, which he claimed was paid to his father, C G Krishna, for training him.
Besides rejecting his plea, the Supreme Court bench headed by the Chief Justice S H Kapadia also upheld the observation made by the High Court that it was sham transaction.
The tennis ace had told the court that his father invested money on him for four years from 1989-90 to 1993-94 to turn him into an international player. He also cited a 1994 agreement with his father to validate the transaction.
However, the HC had upheld the order of the Income Tax department, which had argued that the 'agreement' between the father and son was entered into only to avoid tax.
The IT department also contended that the 'transaction' violated a fundamental Hindu law, which holds that it is the duty of the father to educate his progeny; besides being contrary to the provisions of the Hindu Adoptions and Maintenance Act.