Meanwhile, Nalini returns fee to I-T dept

The case had challenged the I-T department’s stand that their purchase of spares for machinery should be treated as capital expenditure and taxed, instead of considered revenue expenditure as claimed by the mills.

The case was given to Nalini after her husband, who was earlier handling it, joined the Union Cabinet as the Finance Minister in May 2004.

She lost the case as a single judge — and subsequently a division bench of the Madras High Court — upheld the contention of the mills.

The sources also denied the Opposition’s allegation that Karpagambal Mills, owned by Chidambaram’s elder brother, Lakshmanan Chettiar, was among the 43 mills that had challenged the I-T order.