Amid loud protests from the Opposition, Finance Minister P Chidambaram today informed the Lok Sabha that the Income Tax Department would move the Supreme Court on the case involving 43 mills after the Madras High Court ruling went against it.The Finance Minister’s wife, Nalini Chidambaram, had appeared as senior counsel for the IT Department in the case, prompting Opposition MPs to raise the issue in Parliament yesterday.Proceedings in both Houses were disrupted today on the issue with the Opposition staging a walkout in the Lok Sabha and the Rajya Sabha being adjourned once.Chidambaram told the Lok Sabha that ‘‘a few weeks ago, the department has sent the papers to the Ministry of Law for filing an appeal to the Supreme Court and appeals are being filed.’’He said that the case in which Nalini Chidambaram had appeared, involved a ‘‘pure question of law’’—whether expenditure on replacement of machinery would be accounted as revenue expenditure or capital expenditure—and the question was decided by the Supreme Court as early as in 1967.But, he added that ‘‘the department seems to have decided to re-agitate the matter.’’He added that the ‘‘principle of law laid down in the case does not apply to textile mills alone, but to all companies and firms, for example, paper mills, steel mills, sugar mills, etc., which replace machinery.’’Giving details relating to the engagement of Nalini Chidambaram as special counsel, the Finance Minister said that the CBDT had issued a statement on August 26 on the circumstances under which Pushya Sitaraman, senior standing counsel of the IT department, Chennai, had hired her with the approval of the board.He said: ‘‘I wish to make it clear that I had no knowledge of the matter at any stage during the relevant period. It came to my notice for the first time only after attempts were made to raise the matter in the Rajya Sabha.’’He added: ‘‘I believe that none of my respected colleagues in the House would seriously think that had the matter been brought to my notice, I would have allowed it to proceed an inch further.’’‘‘Let me make it clear, categorically and respectfully that had the matter been brought to my notice at any time earlier, I would have ensured that the proposal to engage Nalini Chidambaram was nipped in the bud and not processed any further,’’ he said.
