SC lets I-T find out "real" worth of Arjun’s palace

The re-evaluation is being done following the directions of the Supreme Court that I-T returns of all politicians and bureaucrats accused in the Jain hawala case should be scrutinised. In all, the returns of 63 alleged hawala recipients were scrutinised and discrepancies found in the property returns of 15 politicians, including Arjun Singh. Re-evaluationproceedings were initiated against all of them.

The September 18 order of the Supreme Court, therefore, has implications for the re-evaluation being done of properties of several former Ministers including Balram Jhakar, V C Shukla, Arif Mohammad Khan, Kalpnath Rai, Pranab Mukherjee and Jaffar Sharief. In their order, the Supreme Court judges have said they were “surprised” that the High Court should have stayed the proceedings and investigation of the I-T investigation wing “in the manner in which it was done.”

Attorney General Soli Sorabjee and Solicitor General Santosh Hegde were part of the Government’s legal team which argued the case on behalf of the Income Tax Department.

The order comes as a shot in the arm for the I-T Department after its re-evaluation was challenged by Arjun Singh. In March this year, I-T officials re-opened Arjun Singh’s assessments, which too was challenged by him.

On March 30, the Assistant Commissioner of Wealth Tax, Bhopal, submitted his report on the constructioninside the 8-acre plot located near the Kerva Dam which houses the marble palace. The two-page report states that while Arjun Singh showed an investment of Rs 18.17 lakh on the property, a number of subsequent additions had been detected by the IT authorities.

The Wealth Tax report also states that when questioned on oath, Santosh Saran, who evaluated the palace for Arjun Singh, admitted that he had not inspected the “entire” farmland and was not in a position to state whether a boundary wall had come up or not. The case of the I-T Department is that Rs 3 lakh had been spent on building boundary wall and that this had not been shown in the report of the registered valuer.

Besides this, the Wealth Tax Commissioner’s report states that available information indicates that Rs 15 lakh had been spent on construction of another building, used as an office by Arjun Singh, Rs 20 lakh for laying water and electricity lines, Rs 5 lakh for installation of modern telecommunication systems and almost Rs 10 lakh onlandscaping and plantations.

The report concludes that Arjun Singh had wrongly asked for an exemption of Wealth Tax since in all, Rs 30 lakh had been spent by him on the Kerva Kothi during the year previous to the assessment year (1987-88). This was over and above the declared cost of construction. The Wealth Tax report was also submitted by the I-T Department during hearings in the Supreme Court.