Abhishek Singhvi in tax soup: officials reject claim that ‘termites ate vouchers,’ slap Rs 56-cr penalty

High Court stays Settlement Commission order which questioned, among others, Rs 5-cr laptop buy

Written by Appu Esthose Suresh , Ritu Sarin | New Delhi | Updated: November 12, 2014 8:19 pm
Congress spokesperson Abhishek Singhvi (Source: PTI) Congress spokesperson Abhishek Singhvi (Source: PTI)

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.”

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First Published on: November 11, 2014 4:07 am
  1. T
    Thinker
    Jan 2, 2017 at 1:20 pm
    I know these termites. Been eating up the country for 70 years . Name - the Indian National Congress! :D
    Reply
    1. J
      Jai
      Nov 15, 2016 at 5:39 pm
      Guys, this is 2014 post
      Reply
      1. C
        Chandu Kale
        Nov 16, 2016 at 12:48 pm
        This is just an adult version of the school excuse "The dog ate my homework".lt;br/gt;Just round up the other termites and go through their crores.
        Reply
        1. F
          Foxxbats
          Nov 15, 2016 at 6:12 am
          Doge ate my homework, phew
          Reply
          1. J
            Jack
            Nov 14, 2016 at 4:58 pm
            Corrupt congress has no right to question Modi
            Reply
            1. K
              Kalyan banerjee
              Nov 15, 2016 at 12:42 pm
              News is good but News is two years old.
              Reply
              1. N
                Nag
                Nov 15, 2016 at 6:29 am
                Chor!!!
                Reply
                1. P
                  P R
                  Nov 15, 2016 at 11:44 am
                  Guilty must be punished Nobody is above the law
                  Reply
                  1. S
                    Sufi
                    Nov 14, 2016 at 5:19 pm
                    Well i was wondering 1st strike would be on bjp politicians.lt;br/gt;But as usual this was for bjp sake, so ofcourse now congress n other oppositions will be trapped.lt;br/gt;N yes just to fool innocent people they will now show some small stricks from bjp politicians as well.
                    Reply
                    1. V
                      Vinesh
                      Nov 15, 2016 at 3:04 am
                      This man comes on TV and starts preaching values when he himself is stooping down to such blatantly dishonest acts. He must be punished. And this must get wide publicity to show how the Congress nurtures such dishonest people. Shame on him. 👎
                      Reply
                      1. A
                        A.D.
                        Nov 15, 2016 at 5:46 am
                        A.M.Singvi claimed that he purchased laptops worth Rs 5 crore for members of his staff over three financial years, if we consider that he has bought any laptop even for Rs. 1.25 L per piece (@ 1.25L you will get a super laptop useful for serious gamers and engineers) he has bought 133 Laptop per year. The question is If he has required the laptops in such a large number, How much staff dose he have emplo? If he have really emplo such a strength of man power, then think what output he is getting out of them? lt;br/gt;The IT has to check with this, and re-verify his declaration from scratch.
                        Reply
                        1. A
                          Ashok Patel
                          Nov 14, 2016 at 6:33 am
                          Abhishek clean bold.
                          Reply
                          1. A
                            Ashok Patel
                            Nov 14, 2016 at 6:32 am
                            Sanghvi out.
                            Reply
                            1. A
                              Anil
                              Nov 15, 2016 at 12:41 pm
                              This article is dt 2014.nov11
                              Reply
                              1. A
                                Awadhesh Singh
                                Nov 13, 2016 at 4:06 pm
                                Strage are the ways of courts in India. Sometimes, I feel that courts especially higher courts are meant for mone people. Don't know if HC asked Mr A M Singhvi to deposit amount of penalty with the court till disposal of writ peion?
                                Reply
                                1. A
                                  augustine
                                  Nov 15, 2016 at 4:00 am
                                  This msg is now trending in watsapp..No one is care to check the dates...please dont fool we common man
                                  Reply
                                  1. B
                                    BhaktHunter
                                    Nov 14, 2016 at 5:59 pm
                                    2014 news
                                    Reply
                                    1. B
                                      Bhupendra Bhagtani
                                      Nov 14, 2016 at 5:05 pm
                                      This is nothing by Congress standards
                                      Reply
                                      1. B
                                        Bimal Kumar
                                        Nov 13, 2016 at 7:31 am
                                        chor Singhvi
                                        Reply
                                        1. B
                                          Binu Pillai
                                          Nov 15, 2016 at 5:35 am
                                          This shows how corrupt these Congress leaders are
                                          Reply
                                          1. C
                                            Cntilgulkar
                                            Nov 15, 2016 at 5:18 am
                                            Here is news from Indian Express.
                                            Reply
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