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Abhishek Singhvi in tax soup: officials reject his claim that 'termites ate vouchers,' slap Rs 56-crore penalty



Multiplying Congress leader Abhishek Manu Singhvi's Income Tax problems, the Settlement Commission has added over Rs 91.95 crore to his declared professional income over a three-year period and slapped a penalty of Rs 56.67 crore. The order has since been stayed. He had moved the Commission on his own but a probe was launched subsequently, prompting him to describe the proceedings as a "cat and mouse game" which "trapped" him.

Citing inability to furnish documentary proof to back his expenses claim, Singhvi had told the Commission that a termite attack on the premises of his chartered accountant in December 2012 had destroyed all records and expense vouchers, documents.

The Income Tax department and the Commission also contested Singhvi's claim that he purchased laptops worth Rs 5 crore for members of his staff over three financial years and was, therefore, entitled to 30 per cent depreciation.

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As first reported first by The Indian Express, Singhvi approached the Commission last year, seeking immunity from penalty and prosecution which has since been denied to him on some counts.

Singhvi moved the Jodhpur High Court which stayed a 103-page Commission order passed on September 11 this year.

"I have been the highest tax-payer among lawyers. Even in this case, the entire income was received by cheque, so were the expenses. So it is a case of over-expenditure and the department not agreeing to it. I went to the Settlement Commission suo motu before any survey or investigation started since I could not back up my claim due to destruction of records, and the loss of which I had reported to police before the I-T probe even began," Singhvi told The Indian Express.

The Singhvi tax case saw the Commission launching a full-fledged investigation into the expenses shown by the assessee. This is what the Commission highlighted:

> The sum has been added to Singhvi's professional taxable income since he took the plea that a termite attack on the premises of his chartered accountant in December 2012 destroyed all his records and expense vouchers/documents. This was not accepted by the Income Tax Department (ITD) and the Commission.

> The Commission's September order noted that since Singhvi's salary sheet had shown that he had employed 14 advocates/professionals to assist him, he would have had to purchase 1,250 laptops (each costing Rs 40,000) to account for the amount under that head.

> The Commission also probed Singhvi's claim that he spent Rs 35.98 crore on purchase of solar panels for his company, Rishab Enterprises. It declared that the transaction was "mainly intended at tax evasion by inflating the cost of the panels". Of Rs 25.16 crore said to have been paid by Singhvi, the company concerned admitted it received only Rs 21.39 crore. The owner of the company which sold the solar panels, and whose premises were searched by the ITD, gave a statement admitting that the cost was "inflated" and that Rs 10 crore was to be repaid to Singhvi in the form of a loan to his sons.

Incidentally, the Commission also challenged Singhvi's original contention — made at the first stage of his assessment — that the net income he earned from his legal practice was in the range of 55 per cent. The order noted the Income Tax contention that other equally senior Supreme Court lawyers had informed the tax department that their net income ranged between 90 per cent and 95 per cent.

The Commission also referred to the earlier probe by ITD in which several cheque payments made by Singhvi — to the tune of Rs 10.97 crore in the same three-year period — were found to be "non verifiable". Reason: When inquiry letters were sent to 91 parties, 37 were returned.

Following the Commission order, Singhvi approached the Jodhpur High Court which granted a stay. In his writ petition, he reiterated the stand he had taken before the tax authorities: "The record of the petitioner had been destroyed on account of termite attack and could not have established existing claims by bringing on record documentary evidence."

He said the loss of documents due to termite attack was reported to police on December 13, 2012. While contesting the I-T view, Singhvi's petition stated: "There is absolutely no finding of the commission to the effect that termite attack, consequent destruction of records or the police report in that regard is false, misleading, lack authenticity or is legally unsustainable."

Singhvi alleged that he had been "trapped" in a "cat and mouse game" and argued that the Commission did not have the jurisdiction to impose penalty on him. "No authority and power has been however been granted to the Settlement Commission in way of the provisions of Chapter XIX-A of the Act to impose and /or direct imposition of penalty under the provisions," petition stated.

On the issue of the solar power company, Singhvi's writ petition said: "No report could be furnished after 12 January 2014 being the expiry of the statutory period of 90 days for furnishing the report... DIT (Director, Income Tax investigation) Mumbai had no locus in the present proceeding... DIT Mumbai referred to ex parte enquiry conducted at Mumbai and is not tenable since the said statement was recorded under section 131 of the Act."

http://indianexpress.com/article/india/india-others/singhvi-in-tax-soup-officials-reject-his-claim-that-termites-ate-vouchers-slap-rs-56-crore-penalty/

NEW DELHI: An additional district and sessions judge in Gwalior, who was heading the Vishaka committee against sexual harassment, could not save herself from the prying eyes of a Madhya Pradesh high court judge and had to resign from judicial service to protect her "dignity, womanhood and self-esteem".

After practicing law for 15 years in Delhi courts, she passed the MP Higher Judicial Service exam and was posted in Gwalior on August 1, 2011. After training under Justice D K Paliwal, she was posted as additional district and sessions judge in Gwalior in October 2012.

In April 2013, she was appointed chairperson of District Vishaka Committee. Her annual confidential report of January 2014 termed her work "excellent and outstanding". But that was not enough. The administrative judge from Gwalior bench of Madhya Pradesh HC kept pestering her to visit him in his bungalow alone, she alleged.

In her complaint to Chief Justice of India R M Lodha and Supreme Court judges Justices H L Dattu, T S Thakur, Anil R Dave, Dipak Misra and Arun Misra, as well as the MP HC chief justice, she said the administrative judge sent her a message through the district registrar to "perform dance on an item song" at a function in his residence. She avoided the function on the pretext of her daughter's birthday.

Responding to her complaint, Justice Lodha said, "This is the only profession where we refer to our colleagues as brothers and sisters. This is unfortunate. I will take appropriate action after the complaint is placed before me."

The very next day of sending a message to dance in his residence, the administrative judge told her that "he missed the opportunity of viewing a sexy and beautiful figure dancing on the floor and that he is desperate to see the same", she alleged.

The judge got angry when she did not pay heed to his "various advances and malicious aspirations". She was subjected to intense scrutiny by the administrative judge. He got more agitated when no fault was found, she said.

"I started commencing court at 10.30 am instead of 11 am and extended the working hours in the evening by one hour to 6 pm," she said but complained that this did not appease the administrative judge, who continued to harass her.

Tired of harassment, she along with her husband on June 22 went to meet the administrative judge, who was "irritated" to find her with her husband and asked her to meet him after 15 days. But even before 15 days could have elapsed, she was served with a transfer order.

In her complaint, she said, "The administrative judge, along with district judge and district judge (inspection), possibly made a false, frivolous, baseless and malicious reporting to the chief justice of MP and got me transferred on July 8, in the mid-academic session of my daughters to a remote place Sidhi by overruling the transfer policy of MP HC."

Her representation for eight-month extension to allow her daughters complete the academic session was rejected. Left with no choice, she called on the administrative judge and pleaded against the abrupt transfer saying it would affect the studies of her child who was in Class 12.

In her complaint, she said, "Mockingly, he replied that I faced this mid-academic session transfer to Sidhi for not fulfilling his aspirations and for not visiting his bungalow alone even once and he also threatened me that now he will spoil my career completely and make sure that I face ruinous prospects all my life."

She claimed the HC chief justice declined to meet her when she wanted to apprise him of the situation. "I was left with no option but to resign, so, I resigned on July 15 in compelling, humiliating and disgraceful circumstances to save my dignity, womanhood, self-esteem and career of my daughter."

Seeking justice from the CJI, she said, "Only because the perpetrator is as powerful as an 'administrative judge' that he can cast an evil eye on me, and I do not even get a hearing. What system are we following and leading this democracy to? If this is how a mother, sister and wife can be treated, who is herself no less than a judicial officer duty-bound to protect society and law, what constitutional goals are we serving?"

http://timesofindia.indiatimes.com/india/Gwalior-additional-judge-says-she-was-sexually-harassed-by-HC-judge-quits/articleshow/39569700.cms?

A sigh of relief was heard around corporate India when finance minister Arun Jaitley said that he would be forming a committee to deal with cases of retrospective taxation and also indicated that he would do away with the provision, once pending cases are dealt with. This relief was, however, not shared by a plethora of politicians from Punjab, Jaitley's home state, who made a beeline for the finance minister's office in Parliament on Monday.

Their grievance was very simple and related to a case which dates back to 2007, when a society was floated by a host of Punjabi politicians cutting across party lines.

This society, which had former Union minister Preneet Kaur (wife of Amritsar MP Amarinder Singh), MP Santosh Chaudhary, deputy chief minister of Punjab Sukhbir Singh Badal and his estranged cousin Manpreet Badal, and former deputy Speaker of the Lok Sabha Charanjit Singh Atwal, as members held 21.2 acres of prized real estate in Chandigarh.

In February 2007, the society entered into a "tripartite Joint Development Agreement (JDA)" with HASH Builders private limited and Tata Housing Development Company Ltd. Under the agreement, the society signed off on transferring its land to the developers in lieu of a four bedroom flat and Rs 82.50 lakh in cash for each member.

The grand plans were, according to top sources in the finance ministry, halted by a writ petition filed in the Supreme Court, due to which the Court has asked Tata to maintain status quo and make sure that "even a brick should not laid in the area." The apex court then referred the matter to the Delhi high court. To make matters worse the Chandigarh administration has told the high court that "political and business interests influenced the Punjab government's decision to clear the project."

"The unkindest cut however, was yet to come," said the source in the finance ministry. The Income Tax (IT) department citing provisions of transfer as defined in Clause (v) of Section 2(47)2 of the Income Tax Act, 1961 and held that the land owners were liable to pay capital gains tax on their share of the gain from the agreement.

Not just, that the assessing officer has held that the transfer arose pursuant to the JDA executed in February 2007. Accordingly, the entire amount of consideration was taxed in assessment year 2007-08. Thus the politicians were told that not only was there a legal impediment to their gaining new flats but that they were now liable to pay huge sums as tax, that too from 2007 onwards.

The Commissioner of Income Tax Appeals confirmed the Assessing Officer's orders, which was followed by a 165 page ruling by the Chandigarh Bench of the I-T Appellate Tribunal in the case of Charanjit Singh Atwal on the development agreement taxability.

This brings us back to Monday and a delegation of these leaders who made a beeline to the finance minister, who is country cousin and a close political ally of some of the members. Sources said that the finance minister heard them out, but he reportedly told them that he was unable to help them as he was opposed to retrospective changes in tax laws or orders. Quite clearly, retrospective tax cuts both ways.

http://economictimes.indiatimes.com/news/politics-and-nation/arun-jaitley-hints-at-doing-away-with-retrospective-tax/articleshow/38573602.cms?prtpage=1

CHENNAI: It could go down as the worst publicity for dhoti, considered a 'national attire' in Tamil Nadu and Kerala. A sitting judge of the Madras high court was denied entry into the Tamil Nadu Cricket Association Club at Chepauk on Friday. Reason: He was wearing a dhoti.

When Justice D Hariparanthaman alighted from his red beacon-flashing official car at the club premises to participate in a book release function organized by a former high court judge, he was least prepared for the 'reception', sources told The Times of India.

When TOI contacted, Justice Hariparanthaman confirmed the incident and said: "Former acting chief justice of the Madras high court Justice T S Arunachalam authored a book — 'Legal Fraternity Embraced Me'. Former chief justice of the Gujarat high court Justice Gokula Krishnan released it and former Chief Justice of the Himachal Pradesh high court Justice R Ratnam received the first copy. I was invited. I went to the venue at 5.25pm. I wore dhoti and shirt. I was denied entry saying unless I wear pants, I could not be permitted entry."

http://timesofindia.indiatimes.com/india/Chennai-club-turns-away-judge-for-wearing-dhoti/articleshow/38225698.cms

A Judge of Madras High Court, who was denied entry into Tamil Nadu Cricket Association Club here for wearing dhoti, the traditional attire of Tamil Nadu, today said it was unfortunate that dress code prescribed by British rulers was being followed in clubs even after independence.

When Justice D Hariparanthaman alighted from his official car at the club premises to participate in a book release function organised by TS Arunachalam, a former Chief Justice of the High Court, some staff of the club told him that he could not enter the premises wearing a dhoti.

They told him that they had instructions from the office-bearers not to allow anyone in the premises who violated the club's dress code.

Protesting the way in which the club treated invitees, Justice Hariparanthaman said in a statement that "dress code was introduced by British rulers in clubs started by them. It is very unfortunate that even after independence only the same dress code continued and our traditional dress is prohibited."

"It is not the first occasion where clubs denied entry to persons for violating dress code. Even former Supreme Court Judge Justice VR Krishna Iyer was denied entry in 1980s in the Gymkhana Club here, who wrote a protest note in the guest book", Justice Hariparanthaman said in the statement.

The book release function was held at club for which Justice Hariparanthaman was an invitee. Former Chief Justice of Gujarat High Court Justice Gokula Krishnan released the book and former Chief Justice of Himachal Pradesh High Court Justice R Rathnam received the first copy.

Senior advocate of Madras High Court R Gandhi and GR Swaminathan, an advocate of Madurai High Court, were also denied entry to the function for wearing dhoti.

http://www.dnaindia.com/india/report-madras-high-court-judge-denied-entry-to-cricket-association-for-wearing-dhoti-2001760

From Legally India:

"The Supreme Court Bar Association (SCBA) has resolved to strip the Supreme Court's library II of its title – Dr LM Singhvi library.

The association was apparently upset after the late senior advocate's son, senior advocate Abhishek Manu Singhvi, wrote a letter to the SCBA underscoring his previous Rs 20 lakh contribution toward the library's renovation but making future contributions conditional to various demands, including not being asked for money from them again.

The library was named as Dr LM Singhvi library in 2009 when Singhvi had last contributed Rs 20 lakh toward its renovation, proposing that the library be named after his late father.

In May 2014 the SCBA again asked for contribution from him to renovate the library. According to the SCBA's claims, one of which Singhvi contests, the senior counsel then stipulated four conditions in a letter on 8 May:

1. A Resolution be passed by the Executive Committee that in future SCBA will not ask for any contribution in connection with Dr. LM Singhvi Library.

2. There should be an inaugural ceremony or dedication ceremony or whatever function after the renovation is done.

3. In the costly items which will be purchased out of Rs. 20 lakh, it may be inscribed on these items that "gifted by Dr. Abhishek Singhvi in memory of Late Dr. LM Singhvi".

4. SCBA and Dr. Singhvi will withdraw all the letters exchanged on this issue and the SCBA will withdraw the resolutions passed.

According to the SCBA notice, the SCBA then passed a resolution on 10 May, noting its "consternation" at "the insinuating tenor" of Singhvi's letter, adding that in 2009 the SCBA had not agreed that "it would be only a one-time payment or that Dr Abhishek Singh [sic] will not contribute for renovation etc. from time to time".

On 13 May SCBA president PH Parekh wrote to the SCBA that he had met with Singhvi to inform him that the deadline for making the Rs 20 lakh contribution was 14 May, and that Singhvi had repeated his conditions in response. Parekh had asked the SCBA for comment on Singhvi's conditions.

On 21 May, Parekh wrote to Singhvi informing him that the conditions were not acceptable to the SCBA. Singhvi replied on 22 May stating that Parekh had "erroneously" reproduced his third condition. He said that instead of the particular inscription that "gifted by Dr Abhishek Manu Singhvi in memory of Late Dr LM Singhvi" on items he gifted to the library, he had only asked that his contribution be "suitably recognised by the Bar, [...] did not suggest any particular format".

The SCBA stated in its resolution that it could not accept any of Singhvi's conditions and that he ought to have either voluntarily contributed for the library's renovation or taken up the SCBA's offer to himself get the renovation done in case he did not want to make the contribution.

It added:

The Committee is of the unanimous view that the tone, tenor and language of the letter written by Dr. Abhishek Singhvi on 21st May ought not to have written by him. Even earlier correspondence is totally unacceptable to SCBA ...

The Executive Committee resolves that the Library no.II with immediate effect will not be described as Dr LM Singhvi library. All plates and plaques etc describing it as Dr LM Singhvi library will be removed. However, photograph of Dr LM Singhvi will continue to remain in library no.II in view of tremendous regard and respect the bar has for Dr LM Singhvi."

http://www.legallyindia.com/201407074846/Bar-Bench-Litigation/scba-strips-lm-singhvi-library-of-lsquo-lm-singhvi-rsquo

Dharamsala: A foreign couple, who is involved in a legal tussle with a local charity being run by the Tibetan administration-in-exile here for more than five decades, is now locked in another battle with two Indian advocates. 

In an unusual complaint to the Bar Council of Punjab and Haryana, the couple - US citizen Karma Lama, a composer of Tibetan music, and his Italian artist wife Paola Pivi -- has alleged that Chandigarh-based advocate brothers Ranjit and Anil Malhotra have charged an exorbitant fee of Rs.3.5 crore in just about nine months in a Tibetan child's custody case. 

The amount includes approximately Rs.35 lakh for expenses and secondary lawyers. Out of the total, Rs.2.5 crore was "paid" via traceable international bank transfers. 

Denying any wrongdoing, the Malhotras said they were engaged as counsel by the couple as per agreed and settled charges. 

The couple had moved against Tibetan Children's Village (TCV) - a home for destitute children based in Dharamsala city - for the custody and guardianship of a seven-year-old Tibetan orphaned child. The case is pending in the Himachal Pradesh courts.

Confirming the receipt of the complaint, Bar council chairman Rakesh Gupta told IANS: "We are seized of the matter." 

"Legal profession is a service, not a business. Charging exorbitant fees is not justified," he added. 

The couple claimed that fee was charged on an hourly basis. The complaint, which this correspondent accessed, alleged that "in nine-and-a-half months of litigation, we were charged a total of $5,31,000, approximately Rs.3.3 crore by the Malhotras. The fee was calculated at $300 per hour -- equivalent to more than Rs.18,000 per hour." 

The Malhotras were hired by the couple in January 2013 and formally discharged as counsel in December the same year. 

The couple said the Malhotras even counted "hours spent talking on the phone, hours spent talking among themselves, hours spent reading the case material and related material, and hours spent doing office work". 

"We made numerous appearances before the National Commission for Protection of Child Rights in New Delhi, before district courts in Dharamsala and Shimla and before Himachal Pradesh High Court while handling the case," Ranjit Malhotra told IANS. 

He said "the motives of the client are highly suspect and they are conducting a malicious campaign against us for extraneous considerations. Their allegations are totally unfounded." 

"Since the Bar Council is seized of the matter we will give the reply to it," Malhotra added. 

The case for which the Malhotras were hired is basically an ongoing row between the foreign couple and the Tibetan administration-run home for destitute children - Tibetan Children's Village (TCV), an autonomous society. 

The couple -- Karma Lama and Paola Pivi - visited Dharamsala on an international research project and met the child, an inmate of TVC, in August 2012. They agreed to sponsor him as guardians. 

In December 2012, the couple took the child (name withheld) for a holiday. 

In the meantime, the couple was informed by the TVC authorities that the child will be sent to France with Tashi Choedon, a Tibetan woman who found the abandoned child in Kathmandu and brought him to the TCV three years ago. 

She disappeared after giving the custody of the child to the TVC authorities. But Choedon came back after learning that the guardianship of the child was given to the couple and said she wanted him back.  

On Feb 4, 2013, a Dharamsala court ordered interim custody of the child to the couple. But the court ordered the couple on Aug 1, 2013 to give the custody of the child to TCV. 

Aggrieved by the order, the couple moved the Himachal Pradesh High Court, which Aug 8 stayed the Dharamsala court order. It said that the custody of the child will remain with the couple but he should not leave India. 

The matter is still pending in the courts. 

http://zeenews.india.com/news/himachal-pradesh/foreign-couple-says-indian-advocates-charged-rs-3-5-cr-fee_931591.html

The  CBI has filed closure reports in nearly a dozen cases involving around two dozen judges of various benches of the Income Tax Appellate Tribunal (ITAT) who were under probe following corruption cases registered against them between 2011-2012. The agency has concluded that there is "insufficient evidence" and the "charges cannot be substantiated".

"Closure reports have been filed in many regular cases and preliminary enquiries while one case is under trial," CBI director Ranjit Sinha told The Indian Express.

The ITAT, a quasi-judicial body, is the highest income tax appellate authority. Its bench usually has two members — a judicial and an accountant member — who are selected by a board chaired by a sitting judge of the Supreme Court.

It was in 2008 that the CBI had first registered a case against Jugal Kishore, an ITAT member from Kolkata, for allegedly receiving a bribe from the bosses of S K Tulsiyan and Co., for delivering "pre-decided'' judgments. The CBI recovered Rs 28 lakh from Kishore's residence. The agency seized 75 "pre-dated judgments" from the hard discs of Tulsiyan & Co. in Kolkata.

Besides Kishore, the CBI named S K Tulsiyan, his brother Shashi Tulsiyan, son Ravi Tulsiyan, "middleman" Nishant Jain, and Kolkata businessman Subhash Bajoria in its chargesheet filed in January 2012. This case is under trial.

Earlier, the CBI had also registered cases against ITAT members, including some sitting high court judges, who were posted in Mumbai, Indore, Ahmedabad, Hyderabad, Agra, Cuttack and Kolkata. A disproportionate assets case was also filed against then ITAT vice-president G E Veerabhadrappa.

But in its closure report, the CBI has said the charges could not be proved and the suspects were able to explain the source of income and assets owned by them and their families. Sources, however, said some of the cases were closed under duress, despite sufficient material evidence.

The agency has also concluded that the charge that the judgments were "pre-written" cannot be proved, and it is a normal practice for the benches to seek assistance from the accountant firms due to shortage of staff.

While it is learnt to have recommended departmental action against some staff members of the ITAT benches, the CBI has advised the ITAT chairman to be vigilant and review the rules and practices related to preparation and delivery of the orders. In a few cases, the agency has said there was no quid pro quo and the judgments were given on merit.

http://indianexpress.com/article/india/india-others/cbi-moves-to-close-graft-cases-against-tax-tribunal-members/

Spain's sunshine toll: Row over proposed solar tax

"We will be the only country in the world charging for the use of the sun," says Jaume Serrasolses.

"Strange things are happening in Spain. This is one of them."

Mr Serrasolses, the secretary of an association promoting the use of solar energy, SEBA, is referring to the government's proposal for a tax solely on those who generate their own electricity.

They would pay a backup toll for the power from their solar panels, in addition to the access toll paid by everyone who consumes electricity from the conventional grid.

Although the tolls vary, if you pay an access toll of 0.053 euros per kWh, you could face a backup toll of 0.068 euros per kWh.

The new tax would extend the average time it would take for solar panels to pay for themselves from eight to 25 years, according to the solar lobby.

The government says that with increasing "self-consumption", the income for conventional energy systems will decrease, but grid maintenance will cost the same.

"If I produce my own energy, but am connected to the grid, having the backup in case my production fails, I have to contribute to the cost of the entire system," says Energy Secretary Alberto Nadal.

The government is hoping the energy reform will settle a debt of 26bn euros (£22bn; $35bn), which has built up over years as a result of regulating energy costs and prices.

Broken promises

This is just the latest in a series of setbacks for the renewable energy sector.

The government has gradually lowered a feed-in tariff - a scheme that paid people to produce their own "green electricity" - first reducing the period over which it was paid, then limiting it to already existing installations and finally an energy reform in July opened up the possibility of withdrawing it retroactively.

At the same time it has not endorsed net metering, a policy allowing solar panel owners to send surplus energy to the grid and use it later. The idea was part of a previous proposal but was not included in the latest reform proposal.

But while the government may have been heavily promoting solar energy six years ago, those who followed that lead may now pay dearly for their investment.

"The majority are people like your or my parents who at one time had savings and wanted to make an investment with a better return," says Piet Holtrop, a Dutch lawyer who is defending over 1,000 of them.

http://www.bbc.co.uk/news/business-24272061

Gujarat High Court Chief Justice Bhaskar Bhattacharya has complained that Chief Justice of India Altamas Kabir — who retires on July 18 — blocked his elevation to the Supreme Court earlier this year because, as a member of the collegium of the Calcutta High Court, he had opposed the appointment of CJI Kabir's lawyer sister to the Bench, a decision he said was tantamount to "rape" of the court.
On September 13, 2010, the CJI's sister, Shukla Kabir Sinha, was appointed to the bench of the Calcutta HC after the HC collegium ignored Justice Bhattacharya's written submission on why she should not be appointed to the post.

CJI Kabir — then a senior judge of the apex court — was a member of the SC collegium that considered the HC's recommendation. However, sources said he had recused himself from the meeting.

On March 19 this year, after being overlooked for elevation to the Supreme Court by a collegium headed by CJI Kabir, Chief Justice Bhattacharya, who was the third seniormost High Court Chief Justice at the time, sent a 10-page letter to the President of India, Prime Minister and the Chief Justice of India.

Two other High Court CJs — Bombay High Court CJ Mohit S Shah and Uttarakhand High Court CJ Barin Ghosh — too were overlooked for elevation.

In his letter to the CJI, accessed by The Indian Express, Chief Justice Bhattacharya wrote: "As a human being, I have a reasonable basis to apprehend that the fact that as a member of the collegium while I was a judge of the Calcutta HC, I raised serious objections against the elevation of Smt Shukla Kabir Sinha, your (CJI Altamas Kabir's) younger sister, is the real reason for making such observations against me."

When contacted, the Prime Minister's spokesperson said: "The letter was addressed to the Chief Justice of India, and the PMO had no role to play in it as appointments of judges are decided by the collegium."

Justice Bhattacharya has asked that his letter be shown to all members of the collegium. He has also requested that he be shown "the material which led you (CJI Kabir) to take such a decision regarding my competence and character". He has said that he will resign if he is given "justifiable reasons".

Neither CJI Kabir nor Justice Bhattacharya could be reached for a comment. Questionnaires emailed to their offices elicited no response. Justice Shukla Kabir Sinha was not available for a comment. Law Minister Kapil Sibal declined to comment.

While rejecting the claim of the three seniormost CJs, the collegium had said that they were "not suitable to hold the office of Supreme Court judge and their elevation as such would prove to be counter-productive and not conducive to administration of justice," according to a Hindustan Times report which Justice Bhattacharya has quoted in his letter.

Justice Bhattacharya has also given his reasons for opposing the CJI's sister's name for judgeship, including what he has called her poor practice, reflected in her annual income-tax statements.

"In my view as an advocate who at the age of 58 years is just capable of earning a net amount of Rs 88,000 from practice should in no case be recommended for judgeship. We cannot lose sight of the fact that a High Court chaprasi gets more than Rs 13,000 per month as salary which is equivalent to Rs 1,56,000 per annum which is almost double the income of Mrs Shukla Kabir Sinha from her practice as a lawyer," he wrote in his note for the collegium, extracts from which are part of his letter to the CJI.

The letter also says that he had raised the issue of the CJI's sister taking "four years for passing BA examination after clearing senior Cambridge and five years for getting MA degree after graduation, although the usual time taken for clearing these examinations is three years and two years respectively".

"I don't have a personal inimical feeling against Mrs Sinha who is just like my sister... However, as I treat the HC to which I belong for the full time-being as my mother, I earnestly believed that to elevate Mrs Sinha at the age of 59, there is no instance in the past of elevation of a Judge from the Bar at the age of 59 years... would give a wrong signal and people would lose faith in the judiciary and the collegium system... For the above reasons, I made my observations which, however, didn't get the approval of the Chief Justice of the Calcutta HC and of Judge Pinaki Chandra Ghose, who was the other member of the collegium and who has superseded me this time," the letter reads. "So far as I can remember, Justice Pinaki Ghose in his recommendation observed that if Shukla Kabir is elevated as a judge, she would be an asset to the judiciary."

Justice Bhattacharya has also written, "When time came for selection of Smt Shukla Kabir Sinha as a Judge of the HC, I was pressured to agree to such a proposal as a member of the collegium, but I thought it would amount to committing rape of the Calcutta HC, which was like my mother and if I didn't raise any objections that would amount to closing my eyes while my mother was being raped. As a result, I used rather strong words so that by looking at the nature of words used by me, the person responsible for sending such a recommendation would have a second thought... Unfortunately, I was unsuccessful in resisting the rape of my mother in spite of my earnest endeavour. However, at the time of my death, I will not repent that I ever compromised with wrong for the sake of my career."

'Another incident'

* Justice Bhaskar Bhattacharya also referred to "another recent incident" that he says could have made the collegium reject him.

* According to Justice Bhattacharya, a former Gujarat HC Chief Justice who is now in the Supreme Court withdrew an excess amount of Rs 54,650 as TA/DA which is not permissible without furnishing proof.

* "There are several other honourable judges who had withdrawn similar amounts in excess of the rules. After receiving such clarification from the Centre, I, as the chief justice of the Gujarat HC, placed the matter in the Standing Committee of seven judges and they unanimously resolved that the honourable judges... should pay back the excess amount," his letter reads.

* As per the letter, when the judge, who is now in the Supreme Court, was requested to repay the excess amount, his office wrote to the HC registrar telling him "not to make any such unnecessary and unwarranted correspondence."

* "As your younger brother, I seek advice from you as to what should be my duty as the present CJ if I find that a former Chief Justice of the High Court who is now judge of the SC is found to have withdrawn excess amount not intentionally but due to some ambiguity in existing rules?" the CJ asks the CJI.

http://www.indianexpress.com/news/gujarat-cj-says-he-lost-sc-berth-because-he-opposed-hc-judgeship-for-cji-kabirs-sister/1140897/0

Ernst & Young LLP has agreed to pay $123 million to resolve a federal tax shelter investigation while admitting wrongful conduct by certain E&Y partners and employees.

The agreement comes in connection with the firm's admitted participation, from 1999 to 2004, in four tax shelters that were used by approximately 200 E&Y clients in an effort to defer, reduce, or eliminate tax liabilities of more than $2 billion, according to the Manhattan U.S. Attorney's Office.

E&Y entered into a non-prosecution agreement with the United States, in which the firm agreed to pay $123 million to the United States and acknowledged a detailed Statement of Facts in which it admitted the wrongful conduct of certain partners and employees. E&Y also agreed to certain permanent restrictions and controls on its tax practice, including a prohibition against planning, promoting or recommending any "listed transaction," which is the same as, or substantially similar to, one that the IRS has determined to be a tax avoidance transaction.

The NPA also requires E&Y's continued cooperation with the government's investigation. In exchange, the United States agreed not to criminally prosecute E&Y for its participation in the tax shelter scheme. The NPA applies only to E&Y and not to any individuals. The Justice Department noted that E&Y has cooperated with the government's investigation into these tax shelters since approximately 2003. In the event that the firm violates the agreement, however, the U.S. Attorney's Office may prosecute E&Y.

According to the Statement of Facts to which E&Y has admitted, and as proven at the criminal trial of certain former E&Y partners:

Beginning in 1999 and ending in 2002, E&Y, in conjunction with various law firms, banks, and investment advisers, developed, marketed and implemented four tax shelter products called COBRA, CDS, CDS Add-On, and PICO. E&Y implemented these four tax shelter products for approximately 200 high net worth clients in an effort to defer, reduce, or eliminate $2 billion in aggregate tax liabilities. E&Y prepared tax returns reflecting tax losses claimed to have been derived from those tax shelter products and subsequently defended certain of its clients in connection with audits of those transactions by the IRS.

A small group within E&Y known as the Strategic Individual Solutions Group was primarily responsible for supervising and coordinating the marketing, implementation and defense of E&Y's tax shelter products. Certain SISG tax shelter products were designed to appear to the IRS to be substantive investments that had favorable tax consequences when, in reality, the products were actually designed and marketed to clients as a series of preplanned steps that would defer, reduce or eliminate their tax liabilities. The typical client participating in these shelters was primarily, if not exclusively, motivated to achieve a desired tax savings.

In order to deceive the IRS as to the true nature of the tax strategies, and to bolster arguments that the transactions had economic substance, some SISG personnel agreed upon and directed other E&Y employees to participate in a concerted effort not to create, disseminate, or publicize documents reflecting the tax motivation behind the strategies, or the preplanned sequence of steps necessary to effect the strategies. These SISG personnel thereby sought to prevent the IRS from detecting their clients' purposes in employing these strategies. For example, in certain instances, members of SISG falsely portrayed the transactions under examination as purely investment-driven transactions, and falsely denied a tax motivation for the transactions in response to IRS Information Document Requests and in testimony to the IRS.

Further, in implementing the sale of tax shelter products, certain members of SISG also prepared documents or correspondence that falsely and inaccurately reflected events or conversations, and that were designed to improperly influence the IRS's view of the merits of the transactions in the event of an audit. These activities continued into 2003 and 2004.

http://www.accountingtoday.com/news/Ernst-Young-Pay-Settle-Tax-Shelter-Fraud-Charges-65931-1.html

The Bombay High Court has pulled up the Income Tax (IT) office for the 'casual approach' of its staff in not acknowledging letters received by them and their refusal to put therein the inward registration numbers.

Justice S J Kathawala, in a recent order, asked the IT authorities to take action against the erring clerks.

The judge also asked the department to forthwith issue a circular to the Commissioners of Income Tax of all the wards making it compulsory for the clerks to sign and put a serial or registration number on copies of letters received by them before handing them over to the bearer of the original letter.

"If such is the attitude of the clerk receiving mails of the ward offices of the Income Tax Office, it would cause grave inconvenience to the persons addressing letters to the Ward Officer, more particularly, a common man, since he would not have the registration number qua the letter forwarded by him to the Income Tax authorities," the judge said

http://www.mumbaimirror.com/mumbai/crime/HC-pulls-up-IT-staff-for-not-acknowledging-letters/articleshow/20789161.cms

This letter from Justice Gyan Sudha Misra is in response to an article by Dhananjay Mahapatra titled 'In Vacation, SC Bench late by an hour' published in Times of India on June 15. The article had a shoulder headline: Justice G S Misra and CJI are habitual late comers. We are reproducing the letter in verbatim.


Dear Sir,

I have been instructed to communicate to you that your newspaper and your Sr. Editor/Reporter Mr. Dhananjay Mahapatra have once again indulged in irresponsible and contemptuous reporting by getting the news story published in all the daily editions (15th June 2013) of the Times of India relating to Court timings of the Vacation Bench obviously to hog limelight denigrating the image of the Institution.

Your report clearly reflects that small-minded people neither have the vision nor the understanding to appreciate a larger issue in the functioning of an Institution but have the audacity to publish mischievous reports as per their perception without disclosing full facts perhaps at the behest of a motivated lobby which needs to be investigated. Fortunately, wide and wiser section of the media do not follow your special trait.

While writing irresponsibly on the subject in a derogatory style with enthusiasm, ignoring its negative impact on the judicial system, your newspaper and the Sr. Editor/Reporter Mr Dhananjay Mahapatra were expected to apprise themselves of full facts that while the Court during the vacation resorted to some flexibility in fixing its time schedule for taking up the matters, it also functioned beyond the Court hours to cater to the heavy Cause List mentioned at the last minute by the counsels to take up matters out of turn in view of their urgency, due to which it had to sit late in the evening daily atleast upto 7 p.m. in order to clear the orders for their dispatch as the orders were of urgent nature. Thereafter, the Judges also had to go through the next day's heavy paper books till late in the night and mornings for long hours. In the process, if the Court exercised some discretion by keeping the time schedule flexible during the vacation, without scarifying on the output, as judges also ultimately are human beings and cannot be expected to behave like robots, it was surely not expected to print irresponsible and misleading stories with half-baked facts It is high time to realize that while the time of lawyers and litigants are precious, the time of Judges also are not dirt cheap who go out of their way to tackle loads of matters and work for much longer hours besides what they devote beyond the working hours in Court and yet expect them to give an account of every single minute or else face derogatory publicity.

You need to remind yourself that you have indulged in this exercise of irresponsible reporting for the second time targeting the Judge in particular as you had published an irresponsible and misleading story regarding the socalled 'daughters liability' in the year 2010 making a mockery of yourself and the newspaper in the estimation of the public at large but that has not deterred you from publishing another story which indicates your prejudice and penchant for cheap publicity. We have thus reasons to infer that you have been deliberately indulging in this exercise to intimidate the Judiciary in general and composure of the Judge in particular which is clearly contemptuous putting the judicial restraint to test.

When you have the audacity to print a news story on any item creating a negative impact on the highest judicial institution, you are surely expected to have printed the entire facts relating to the story after checking the full facts as to how many hours the Court had been devoting to the matters as Vacation Judges reducing even the time of the lunch break to half an hour and very often skipping it over. Perhaps, you need to be reminded that a newspaper and the scribe cannot be allowed to exercise control or disciplinary jurisdiction over the functioning of an Institution in this manner howsoever discreet it may be, merely because you are able to denigrate the image by misusing the power of print or any other media violating all norms of ethics of journalism itself which is also equally expected to exercise restraint considering its influence on the mindset which cannot be taken lightly.

You and some of your interviewees would do well to remind themselves before sermonizing that the exterior form or upper crust of an institution is surely not the greatest virtue more so in the Judiciary as wisdom, substance, content and comfortable disposition of a judge is far more important than indulging in rigidity of any form while discharging judicial functions.

You are expected to publish this response to your story forthwith in your newspaper as prominently as you published your story, failure of which will follow consequence.

Dhananjay Mahapatra replies:

The story was based on facts and I stand by it.

http://timesofindia.indiatimes.com/india/Judges-time-not-dirt-cheap/articleshow/20658201.cms

Congress spokesperson and Rajya Sabha MP Abhishek Manu Singhvi has moved the Income Tax Settlement Commission (ITSC), seeking immunity from levy of penalty or institution of proceedings for prosecution.

Singhvi has disclosed "undeclared income" of around Rs 11 crore and paid Rs 3.26 crore as tax on the amount after receiving notices from the Income Tax Department about his returns.

The additional income had not been included in the returns as "there was an error in computation and laxity on the part of those who maintain my accounts," Singhvi told The Indian Express.The Income Tax Department, however, has said the additional income disclosed by Singhvi is not true and complete and has estimated the amount at Rs 22.86 crore, taking his total tax liability to Rs 7 crore. But Singhvi has contested this.

Also, the IT Department's notices — which were sent starting in late 2011 — and its estimate of Rs 22.86 crore additional income is for just the one assessment year of 2010-11 (financial year 2009-10). Income Tax Department sources said investigators looking into his returns for other years suspect that his undeclared income could be much higher. Singhvi, however, has said that the Rs 11 crore he has disclosed as undeclared income is for three assessment years starting 2010-11. "I have paid around Rs 3.26 crore towards tax liability and my application is held to be valid. The investigation report for the one year (2010-11) talks about income to be added back, subject to final investigation, is Rs 22.86 crore, which means additional tax of Rs 7 crore, but denied by us. The investigation report itself is indicative and asks for further investigation," Singhvi said.

But the Commissioner of Income Tax, Jodhpur, where Singhvi is assessed, has told the ITSC that the "additional income declared by the applicant is much less than likely to be computed. There are also doubtful nature of various expenses claimed in the light of huge cash withdrawals (sic)". The disclosure is not true and full and therefore his application should be rejected, the commissioner has said.

Singhvi's troubles with income tax authorities, sources said, started after the Financial Intelligence Unit of the finance ministry in 2011-12 generated 17 suspicious transaction reports related to what were said to be huge cash withdrawals of over Rs 120 crore that were traced to Singhvi's bank accounts. The Income Tax Department, after receiving the reports and a complaint, investigated the case and issued a notice to Singhvi, seeking his clarification on the withdrawals. Sources in the Central Board of Direct Taxes also alleged that investigation of the huge withdrawals showed irregularities in billing/expenses which were not explained. A major part of these expenses is shown as having been paid in the last three months of each financial year, they said. They also said that they are looking into Singhvi's agriculture income and payments to lawyers and have decided to reopen his income tax returns for six years starting with the assessment year 2006-07 under section 148 of the Income Tax Act. This provision gives the department power to reassess returns if it feels taxable income has escaped assessment and accordingly, notices have been issued to Singhvi.

But Singhvi has countered the claims in his ITSC application."Huge withdrawals do not ipso facto amount to suspicious transaction in the light of definition of the term STR under Prevention of Money Laundering Act," Singhvi has said. He also told The Indian Express that he has questioned his returns for six years being reopened. "We have questioned and objected to that, there is no reasoning for reopening of IT returns and I will challenge that," he said.

Under income tax guidelines, the penalty for failing to make a full and true disclosure could go up to 300 per cent of the tax which was sought to be evaded along with rigorous imprisonment of seven years.

The ITSC is a quasi-judicial body for alternate dispute resolution. It allows a one-time tax evader or an unintending defaulter to make a clean breast of his or her affairs and the benefit of the settlement mechanism can be availed by a tax-payer only once in a lifetime, the commission says.The settlement mechanism allows taxpayers to disclose additional income over and above what has been already disclosed before the Income Tax Department. The applicant has to pay full tax and interest on the additional income disclosed before the commission, before filing the application. The commission then decides on the admissibility of the application.

On May 10, the ITSC declared Singhvi's application to be valid for seeking a report from the Income Tax Department. The ITSC is required to pass the final settlement order within 18 months of the application."The matter is still unadjudicated, unproved and contentious. There will be full investigation, only then orders shall be passed," Singhvi told The Indian Express.

http://www.indianexpress.com/news/abhishek-singhvi-moves-it-settlement-commission-over-undeclared-income/1130437/0

NEW DELHI: Punctuality, an important defining character of Judges, is the latest casualty in the Supreme Court, the role model for high courts and the subordinate courts.

Old timers recount there was a time when litigants used to set their watches to 10.30 am when Judges of the Supreme Court assembled to begin proceedings. But, no longer, they lament.

Lawyers and litigants grumble under their breath when Judges sit late. But, they dare not comment openly as they do not want to risk the wrath of the Judges and affect the fate of their cases and clients.

Chief Justice of India (CJI) Altamas Kabir, who sits in court no. 1, is usually late to the court every day and the bench headed by him seldom commences judicial work at scheduled 10.30 am. But, Justice Gyan Sudha Misra appears to be setting a record of her own in coming late to the court.

During normal working days, she too comes late to the court. But, during the ongoing summer vacation, punctuality in the SC appears to have lost its meaning as the bench headed by her, which was sitting from May 30 to June 14, assembled at least 60 minutes late on every working day.

Three days ago, the bench headed by her assembled at 12 noon instead of 10.30 am. On entering the court room packed with lawyers and litigants waiting patiently, she sported a wry smile and said - "Thanks for your patience!" Justice R S Sodhi, who is practicing in the SC after retiring as a HC Judge, responded - "Thanks for coming!"

ToI sought views of retired CJIs, SC Judges and lawyers about sanctity of punctuality in judiciary. Former CJI V N Khare said, "The Supreme Court Judges are the role model for High Court Judges and presiding officers of subordinate courts. If they are not punctual then it would set a very bad precedent for others."

"Punctuality is the first and foremost thing which is in the hands of the Judges. If for some exceptional urgent situation which delayed a Judge, it should be notified so that the lawyers and litigants are not made to wait unnecessarily," Justice Khare said.

Justice (retired) B N Srikrishna said, "When I became a Judge of the Bombay High Court, then Chief Justice P D Desai had told me that the least a Judge can do is to sit on dot at the scheduled time. That is what I have done in my entire life and I think it is the duty of every Judge to be scrupulously punctual".

Senior advocate and BJP leader Ravishankar Prasad said, "Punctuality is the hallmark of judicial discipline. It is also an essential ingredient of the functioning of all courts, especially the Supreme Court."

In the first M C Setalvad Memorial Lecture in 2005, former CJI R C Lahoti had said, "Four qualities are needed in a judge which are symptomatic of functional excellence. They are punctuality, probity, promptness and patience."

One of the legal luminaries and former CJI M Hidayatullah too had placed great importance on Judges being punctual. According to him a Judge who does not observe punctuality of time does not believe in rule of law, Justice Lahoti had recounted.

Former CJI Y K Sabharwal too had stressed the importance of punctuality for Judges. "A Judge has to be punctual and regular in adhering to the court hours. The need for punctuality and regularity is not only to hve full control over the work but also to have a moral authority to check indiscipline amongst those who are expected to play a role in the functioning of the court, including the court staff, members of the bar, the litigants, witnesses etc."

http://timesofindia.indiatimes.com/india/In-vacation-Supreme-Court-bench-is-late-by-an-hour-every-day/articleshow/20599333.cms

http://moneylife.in/article/goas-advocate-general-is-the-highest-paid-across-the-country-reveals-rti/32698.html

Goa's Advocate General Atmaram Nadkarni is being paid Rs8 lakh per month excluding other perks, the highest amount paid to an AG across the country. Even the Attorney General of India is paid Rs90,000 per month. Nadkarni's fees were increased by the Parrikar government in Goa through an order last month, says a RTI activist

The Advocate General (AG) of a state is a Constitutional post and authority duly appointed as per Article 165 of the Constitution of India. He is the principal law officer of a state who advises the government on legal matters, defends and protects the interest of the state government and gives full legal guidance to the state government in the form of its policy and execution of its decisions. He is assisted by a team of law officers and office staff.

The Advocate General of any state of India is offered monthly remuneration in the form of fees for appearance in the high court with a defined upper limit (the appearances could be as frequent as being daily), fees for appearance in Supreme Court on behalf of the state government, as well as perks in the form of house accommodation, conveyance and staff.

In most of states, the monthly remuneration of an AG is not more than Rs1 lakh per month, excluding the perks. There is no hard and fast rule for fixing the monthly fees/remuneration of an AG though as Article 165 of the Constitution of India states that, "The Advocate-General shall hold office during the pleasure of the governor, and shall receive such remuneration as the governor may determine."

However, in the case of Goa, which happens to be the smallest state of the country, the AG seems to be overtly pampered, at the cost of the public exchequer. Advocate Aires Rogrigues, a Goa based lawyer and RTI (Right to Information) activist, procured documents through RTI pertaining to the fee hike sanctioned by chief minister Manohar Parrikar and implemented through a government order last month. Documents reveal that the AG of Goa is perhaps the highest paid public servant of the country.

Now, Atmaram Nadkarni who is presently the AG of Goa has been awarded Rs10,000 per appearance before the high court as professional fees with the upper limit of Rs8 lakh per month (it was Rs5 lakh per month earlier). He gets paid Rs75,000 as fees for every appearance before the Supreme Court (earlier it was Rs25,000 per month) as well as Rs75,000 for every official visit to New Delhi for conferences, special leave petitions; writ petitions and civil applications. He also gest fully furnished rent free government accommodation or Rs20,000 per month for it and staff on par with the rank of a Cabinet minister. This is with retrospective effect from 1 April 2012.

Strangely, the documents also reveal that chief minister Manohar Parrikar by a note moved on 30th July last year directed that henceforth no senior counsel be engaged by the government in any matter whatsoever before the Supreme Court or Green tribunal. The chief minister further directed that the Advocate General would represent the state government in all matters before the Supreme Court.

States Rodrigues, "the Advocate General is supposed to represent cases only regarding constitutional matters but Nadkarni has been given the sole authority to appear for any matter before Supreme Court or Green Tribunal, obviously to help him fatten his fees."

Nadkarni, who is allegedly also a legal expert for some controversial mining companies has been blessed by this meteoric increment in remuneration through personal interest shown by chief minister Parrikar, who is otherwise praised for good governance in the state. In a file noting dated 31 Dec 2012, Parrikar overrules the state law department's stay (which directed that the fee structure should be upto only Rs5 lakh per month which is incidentally very high in comparision of other states). Parrikar's file noting states thus: "there appears to be some errors in the cabinet approved, based on the directions that were issued may be due to communication gap. In view of the same following corrections may be incorporated:

1. Maximum limit to fees be increased to Rs8.00 lakh in place of Rs5.00 lakh which were decided three to four years back

2. We may include per official visit to New Delhi for 'conferences' in addition to 'per appearance per day'

3. We may replace the staff pattern by 'as applicable to the cabinet minister'

With above correction modified, draft may be put up to Cabinet for approval.

Manohar Parrikar, 31.12.12."

As per the chief minister's direction, the revised fees were placed once again before the Cabinet on 27th February this year which approved the hike to a maximum of a monthly Rs8 lakh for appearances before the high court and in addition Rs75,000 for every visit to Delhi for conferences or appearance before the Supreme Court.

States Adv Rodrigues, "Goa despite being the smallest state is not only hosting India's highest paid Advocate General but the country's highest paid public servant.  The president of India is paid Rs1.50 lakh a month while the Chief Justice of India Rs1 lakh. A Supreme Court judge earns Rs90, 000 and a high court judge takes home Rs80,000 a month. The Attorney General of India is paid equivalent to the salary of a Supreme Court judge which is Rs90,000. However, the Advocate General of Goa Atmaram Nadkarni out beats them all, while he gets paid upto a whopping Rs8 lakh a month. Besides this he also pockets Rs75,000 for every official visit to New Delhi."

Ever since Nadkarni has taken over as AG on 8 March 2012, he has appeared in the High Court on an average of 3-5 hearing per day, even more, as he appears and gets paid Rs10,000 even for an adjournment. The earlier AGs were paid appearance fees in the High Court on an "effective hearing". Also, their fee of Rs25,000 per appearance in the Supreme Court was included in the Rs5 lakh maximum remuneration paid per month.

Rodrigues has demanded a CAG scrutiny. He says, "This gross anomaly defies all logic and is a fit case to be examined by the Comptroller and Auditor General (CAG). Public funds cannot be allowed to be squandered in this high-handed manner.''

The controversy over Goa AG's monthly remuneration is not new. Rodrigues had similarly procured documents under RTI of the earlier AG, Subodh Kantak who had been paid Rs5.13 crore for the period from 14 February 2005 to May 2011.''

Rodrigues is campaigning for bringing down the monthly earnings of Goa's AG on par with other States.

 The Income Tax department has detected alleged tax evasion to the tune of Rs. 7 crore in the business transactions of Purti group of companies related to former BJP president Nitin Gadkari.

Probing the alleged dubious transactions of the Purti Power and Sugar Limited (PPSL) since last year, the department has completed assessments pertaining to the last two financial years and has found evasion to the tune of more than Rs 7 crore, top official sources said.

The Purti group, in its reaction, said it has not received any notice in this regard. A notice is not any indicator of any wrongdoing, it said, adding that Mr. Gadkari was not associated with the Purti group for the last two years.

"Our attention has been drawn to reports in a section of media that the Income Tax department is serving a tax assessment notice to the Purti Group for the last two assessment years. We would like to make it clear that neither the Purti group nor any functionary of the Purti group has received any notice so far," Nitin Kulkarni, PRO of Purti Group said in a statement.

"If any tax assessment notice is received, our MD Sudhir Dive in consultation with our tax advisors will give an appropriate response. However, a tax assessment notice is a routine procedure. There are different levels of appeal at various stages. The Purti group will deal with the matter.

"The tax assessment notice is certainly not any indication of wrong doing. We would like to place on record the fact that Nitin Gadkari has not associated with the Purti group from last two years," Mr. Kulkarni added.

The I-T department has begun the final scrutiny of documents of all the Purti group companies and the other assessments would be completed by the year end, the official sources said.

While preparing the final assessment orders, the department has taken into cognisance the statement of Mr. Gadkari and other senior officials of Purti group.

http://www.thehindu.com/news/national/it-dept-detects-rs-7-crore-evasion-in-gadkaris-companies/article4685956.ece

Speech by the President of India, Shri Pranab Mukherjee at the Valedictory Ceremony of the 65th Batch of Indian Revenue Services

Good Morning.

1. I am happy to be amidst you on this occasion of Valedictory Ceremony of the 65th Batch of IRS. At the outset, I would like to congratulate the officers, who have successfully completed their professional training.

2. I have had decades of association with the department from my days as MOS in Finance Ministry in the 70`s. I have visited National Academy of Direct taxes (NADT), on a number of occasions. I am therefore witness to the evolution and growth of this premier academy.

3. The Income Tax Act is one of the oldest Acts in India. It was introduced in 1860 as a punitive tax by the British after the rebellion of 1857. Since Mr. James Wilson introduced Income Tax in British India, the Department has come a long way.

4. You will find it interesting to know that the collection of direct taxes in 1860-61 was just Rs. 30 lakhs. In contrast, the revised target for 2012-13 was Rs. 5,65,835 crores. As per the budget estimates for the direct taxes for the year 2013-14, the direct tax collection is likely to be around Rs. 6 lakh 68 thousand crore, which is around 54 percent of the gross tax revenue receipts of the Central Government. Not only has there been a quantum increase in the collection of direct taxes, but it now accounts for the majority of tax collections. Direct taxes are anti inflationary compared to indirect taxes. They are still below the target we want to reach but the rise to over 50 percent of revenue is a positive feature.

5. Tax collection is neither a simple nor popular task. Tax collectors should be conscious of the rights and duties of citizens. The tax payer should be seen as an important partner in generating revenue for all our national endeavours. It is the tax they provide which funds welfare schemes, helps maintain law and order, protect our borders etc. Many empires have collapsed in the past because Governments did not have money to pay their soldiers. Kautilya`s words 'Kosh Moolo Dandah' i.e. "revenue is the backbone of administration" continues to be as relevant today as it was thousands of years ago.

6. In a globalized world, more than two-thirds of trade is between related group entities. The inter-group transactions offer an opportunity for multinational enterprises to locate their profits in favourable tax jurisdictions with low taxes or no taxes. Issues like Transfer Pricing are also very complicated. Taxation has thus acquired new complexities with political, legal as well as international ramifications. India has been taking measures in the form of Double Taxation Avoidance Agreements and Tax Information Exchange Agreements to safeguard its interests. Earlier, countries were very reluctant to share information. One of the indirect benefits of the 2008 financial crisis was that recalcitrant countries have been compelled to share information.

7. The Income Tax department has been one of the front runners in taking technological initiatives with a view to handle the expectations of our tax payers. A series of steps have been taken - Centralisation of tax collection, simplification of tax forms, improvements in the method of submitting taxes, simplification of tax laws etc. The modernisation of our tax laws is very important.

8. The Government depends on you to collect taxes from the people in an efficient manner. I have no doubt you will discharge your responsibilities to the motherland with competence and confidence.

9. Before I conclude, I would like to remind you about Father of our Nation Mahatma Gandhi's Talisman:

"Whenever you are in doubt, or when the self becomes too much with you, apply the following test. Recall the face of the poorest and the weakest man [woman] whom you may have seen, and ask yourself, if the step you contemplate is going to be of any use to him [her]. Will he [she] gain anything by it? Will it restore him [her] to a control over his [her] own life and destiny? In other words, will it lead to swaraj [freedom] for the hungry and spiritually starving millions? Then you will find your doubts and yourself melt away."

I wish all of you a bright future.

Jai Hind

[On account of right connections, CA gets VIP treatment in jail]

On account of right connections, CA gets VIP treatment in jail

Though the jail in Patiala has quite a line-up of VIP inmates - a former deputy commissioner, senior superintendent of police, former MLA and powerful Akali leaders, besides a top taxman - the one whose special treatment overshadows others' is Ashwani Gupta, a chartered accountant arrested by the CBI on April 3 from Jalandhar for allegedly being the middleman in a bribery deal.

Gupta has served on the board of the State Bank of Patiala, where he led the audit committee, is a member of the steel consumers' council of the union government, and is a special invitee to the direct taxes committee of the Institute of Chartered Accountants of India (ICAI). But perhaps most importantly, the Doaba-based CA, in judicial custody since April 8, is a financial adviser to six current and former ministers of Punjab, two of whom are learnt to have called the jail superintendent to ensure he gets VIP treatment.

Hence, there's no limit of visitors or outside food, he gets mineral water, and the deputy superintendent visits him daily, according to a high-ranking officer who provided the information on the condition of anonymity.

Ironically, even income tax deputy commissioner TK Bhattacharya, who was arrested along with Gupta at Jalandhar for taking a bribe of Rs. 6 lakh from an industrialist to hush up a tax evasion case, only has his family visiting him. At the time of arresting Gupta and the Indian Revenue Service (IRS) officer Bhattacharya from Gupta's house, the police had found Rs. 67.5 lakh there.

So sound is Gupta's proximity to the political circle that aides of a cabinet minister reportedly visited the jail to meet him and oversee the VIP facilities, sources told HT.

Others who have met him - without making an entry in the register - include an additional director general of police (ADGP)-level officer posted at the headquarters in Chandigarh, two inspectors-general, several industrialist and politicians.

"He is the CA of almost all big industrial houses in Doaba in which politicians have invested their money directly or indirectly. They must be worried what he could have told the CBI," remarked a jail officer, who said he was surprised how he gets even better treatment and more visitors than former Patiala DC and IAS officer Vikas Garg, accused in a Rs. 200-crore land scam, and former MLA and Akali leader Mangat Rai Bansal, who was recently handed seven-year jail in a fraud case.

Though jail superintendent Bhupinderjit Singh denied giving any VIP treatment to Gupta, he added, "Yes, many people come to see him, and now we have decided to curtail the limit."

http://www.hindustantimes.com/Punjab/Patiala/On-account-of-right-connections-CA-gets-VIP-treatment-in-jail/SP-Article1-1049874.aspx

 After Nokia and Royal Dutch Shell, the Income Tax department has sent a demand notice to Microsoft's Indian arm, which said it has challenged the same.

I-T department reportedly sent notice to Microsoft seeking details of its income from Indian operations for four years beginning with the 2005—06 fiscal.

Details have been sought about income from work done at Microsoft's Indian research and development sites on several softwares, which were marketed globally.

When reached for comments, Microsoft India said it has approached appellate forums for the resolution of the issue.

"Microsoft complies with the tax laws in each jurisdiction in which we operate. We are seeking relief against the transfer pricing (TP) adjustments through the appropriate appellate forums," it said in an e—mail statement.

The I-T department notice reportedly does not quantify the amount of profits earned by its US—based parent Microsoft Corporation that are attributable to the work performed at its R&D centres in India.

The company said: "Since the matter is sub judice, we are unable to provide further details or comments regarding the same. We are hopeful that the Rangachary Committee recommendations on R&D Centres and Safe Harbours will help facilitate resolutions to TP litigations in the IT industry."

Last year, the government had set up a panel, headed by former Central Board of Direct Taxes (CBDT) Chairman N Rangachary, to address issues like approach to taxation of development centres, tax treatment of 'onsite services' of domestic software firms and those related to finalising Safe Harbour provisions.

Safe Harbour principles are international disclosure practices to check litigations in transfer pricing - an accounting mechanism undertaken by MNCs to reduce their tax liabilities.

In March this year, the Indian subsidiary of the Finnish mobile phone maker Nokia was served the IT notice asking it to pay over Rs 2,000 crore for alleged evasion of taxes in its business transactions in the country.

Similarly, tax authorities in February 2012 charged Shell India, part of Anglo—Dutch oil major Royal Dutch Shell, of under—pricing a share transfer within the group by Rs 15,220 crore and consequently evading taxes.

The order relates to the issue of 8.7 crore shares by Shell India to an overseas company Shell Gas BV in March 2009.

http://www.thehindubusinessline.com/industry-and-economy/info-tech/it-dept-issues-notice-to-microsoft-for-understating-income/article4647303.ece

The Aditya Birla Group has hit back at the revenue authorities attempts to tax a demerger struck in 2009, wherein Aditya Birla Telecom Limited (ABTL) transferred its telecom licences for the Bihar circle, along with other assets and liabilities, to its parent, Idea Cellular. Idea CellularBSE 2.54 % and ABTL have both moved the first appellate authority i.e CIT (Commissioner of Income Tax), Appeals and challenged the demand orders seeking a total of Rs 3900 crores in taxes, two sources familiar with the development told ET NOW. The CIT (Commissioner of Income Tax), Appeals is an independent judicial authority that can either confirm, enhance or reduce the quantum of the tax demand under appeal. ET NOW was the first to report the development.

" The appeals were filed last week and seek a stay on the demand orders. The ABTL appeal says the de-merger was done at nil consideration and hence no capital gains arose on the transfer. Idea has argued that it acquired a capital asset as part of a demerger scheme approved by the high court and therefore there was no additional income," said one of the two individuals cited above. When contacted, an AV Birla group spokesperson declined to comment on the development.

The I-T department has treated the transfer of licence, assets and liabilities from ABTL to Idea Cellular as a slump sale, which is subject to capital gains tax and subsequently ABTL was served with a tax demand of Rs2,400 crore. Idea Cellular was issued a tax demand order of Rs1,500 crore on business income arising out of the transfer of telecom licences and other assets from ABTL as part of the demerger.

In an earlier email response to ET NOW's queries on the demand orders being issued, the company said "The transaction involves a scheme of restructuring between a wholly owned subsidiary and a parent company with the sole objective of administrative consolidation of a telecom licence of one service area in the parent company, without any financial transaction or transfer of funds."

Tax experts feel attempts by the income tax department to bring such corporate demergers under the tax net could make internal restructuring risky and increase transaction costs.

http://economictimes.indiatimes.com/news/news-by-industry/telecom/aditya-birla-group-challenges-rs-3900-crore-tax-bill/articleshow/19698057.cms