The Income Tax department is likely to issue notices to Congress leaders Sonia Gandhi and Rahul Gandhi asking them to pay tax and penalty on “income” of Rs 1,300 crore that investigators believe they earned from the transfer of shares of Associated Journal Ltd (AJL), publishers of the now-defunct party newspaper The National Herald.
Officials told The Indian Express that the move follows investigations conducted on a complaint received from BJP leader Subramanian Swamy who alleged that the Gandhis misappropriated AJL’s assets while transferring their shares to the newly formed Young India Ltd.
According to I-T records, 83.3 per cent of Young India Ltd is held by Sonia and Rahul, 15.5 per cent by Congress veteran Motilal Vohra and the remaining 1.2 per cent by party loyalist Oscar Fernandes.
I-T investigators allege that since the Gandhis’ shares were transferred after Young India Ltd acquired the publisher’s shares, they should have been revalued in the context of assets originally held by AJL, sources said.
This could be a case of “concealment of income” as the “fair value of the transferred shares is much higher than their face value”, sources said, adding that 30 per cent tax and additional penalty could now be levied on the shares.
Swamy had alleged that AJL has assets worth Rs 2,000 crore, which was owned by the Congress party, and its earnings had been exempted from taxes. But when the Gandhis floated Young India Ltd, which acquired 99.1 per cent shares of AJL, the two became individual owners of these assets, he claimed in the complaint.
When contacted, Kapil, Sibal, the Congress leader and lawyer representing the Gandhis, said: “This is nothing but political vendetta. Young India Ltd is a Section 25 company; by virtue of that, the shareholders cannot get any income, dividend or proceeds from sales of assets. So where is the question of benefit to shareholders? This is a government reaction to the traction the Congress leadership is getting after they failed to keep their promises.”
Sources said I-T investigations have revealed that Suman Dubey and Sam Pitroda — both are known to be close to the Gandhi family — transferred 500 shares each of Young India Ltd at par value of Rs 100 to Sonia Gandhi and Oscar Fernandes after acquiring 99.1 per cent shares of AJL.
Later, sources said, 3,900 fresh shares of Young India Ltd were issued, reshaping the current ownership structure as follows: Sonia Gandhi (1,350 shares), Rahul Gandhi (1,900), Moti Lal Vora (600), Oscar Fernandes (50).
According to the value computed by I-T based on Swamy’s estimate of AJL’s assets, the total value of shares owned by each shareholders is: Sonia Gandhi (Rs 535.14 crore), Rahul Gandhi (Rs 753.16 crore), Motilal Vohra (Rs 237.84 crore) and Oscar Fernandez (Rs 19.82 crore).
But sources said the department has left it to the assessing officers to determine the “fair value” of AJL’s assets and revalue the share prices and tax payable by the shareholders accordingly.
Swamy had also filed a complaint in a Delhi trial court against the Gandhis on the AJL issue, which led to summons being issued last July to them, and also Vora, Fernandes, Dubey and Pitroda.
The defendants subsequently obtained a stay from the Delhi High Court following which the matter reached the Supreme Court — it refused to vacate the stay. The next hearing in the High Court is due on July 2.