Bofors scandal: Govt had paid in excess, says tribunal

Discussion in 'Politics & Society' started by S.A.T.A, Jan 3, 2011.

  1. S.A.T.A

    S.A.T.A Senior Member Senior Member

    Mar 28, 2009
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    Bofors scandal: Govt had paid in excess, says tribunal

    The Bofors ghost is back to haunt the Congress as an Income Tax tribunal has observed that the government had to pay excess amount of about Rs 41 crore, which was passed to the late Chaddha and Quattrocchi against the terms of contract.

    An income tax tribunal has said that kickbacks of Rs 41 crore were paid to the late Win Chaddha and Italian businessman Ottavio Quattrocchi in the Howitzer gun deal and that they are liable to pay tax in India on such income.

    “... inaction in this regard may lead to a non-existent undesirable and detrimental notion that India is a soft state and one can meddle with its tax laws with impunity,” the Income Tax Appellate Tribunal (ITAT) said in its 98-page order.

    The Tribunal gave this order while dismissing an appeal by the late Win Chaddha’s son against income tax department’s claim of Rs 52 crores and Rs 85 lakh from his father for the assessment years 1987-88 and 1988-89.

    In the order, the Tribunal details the denials by gun maker Bofors about existence of middlemen in the 1986 deal valued at Rs 1,437 crore and the efforts by Quarterdeck to open a series of accounts to transfer funds in an attempt to obliterate the money trail.

    Holding that Bofors should have reduced the commissions paid from the contract price, the Tribunal observed that government had to pay excess amount of about Rs 41 crore, which was passed to the late Chaddha and Quattrocchi against the terms of contract.

    Quattrocchi was known to be close to the Gandhi family and tribunal’s observations in the Bofors episode may have come at an inopportune time for the Congress and the government its head Whig are already battling various allegations of corruption. He left India in 1993 even as a CBI case was filed on kickbacks in the deal.

    The order mentions that a commission of Rs 32.66 crore was transferred to M/s. Svenska Inc., Panama, which was traced to Chaddha, and was credited in an account of Swiss Bank Corporation, Geneva.

    Similarly, Rs 8.57 crore was transferred to A E Services Limited, c/o Mayo Associates SA, Geneva, which was opened only a fortnight earlier on August 20, 1986.

    It emerged that despite Indian government’s insistence not to appoint or pay any agent, Bofors entered into a fresh consultancy agreement with AE Services of UK at the behest of Quattrocchi.

    “This amount of SEK (Swedish Kroner) 50,463,966 works out to be exactly 3 per cent of the amount of advance paid by the government of India to Bofors and was, thus, perfectly in accordance with the terms set out in the AE Services Limited-Bofors agreement dated November 15, 1985,” the order said.

    The two-member bench comprising R.C. Sharma and R.P. Tolani held that both Win Chaddha and entities through which money was transferred as commission to Quattrocchi were liable to pay tax in India.

    “In our view the department should have carefully examined the issues about their taxability and their having permanent establishment in India and appropriate proceedings should have been undertaken to assess and recover taxes.

    “We may point out there exists a serious issue apropos Bofors for not having deducted withholding tax i.e. TDS, from such payments to the assesses/Svenska, AE Services, Quattrocchi.

    “In our view, to enforce the rule of law, these steps were desirable to bring all the relevant income tax violations to the logical end by the income tax department. Inaction in this regard may lead to a non-existent undesirable and detrimental notion that India is a soft state and one can meddle with its tax laws with impunity,” the tribunal said in its 98-page order.
  3. bhogta

    bhogta Regular Member

    Jan 3, 2010
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    Even every body know this. But the problem is every buddy from government to opposition are corrupt. I never ( for me only) seen a single politician got charged for corruption and paid back the amount.
  4. Rahul Singh

    Rahul Singh Senior Member Senior Member

    Mar 30, 2009
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  5. S.A.T.A

    S.A.T.A Senior Member Senior Member

    Mar 28, 2009
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    Barely has has congress party com to term with the storm created by the new wife,ghost of the old nagging wife from the past comes back to haunt it.This past 12 months have been like Kumbhmela of the political scandals and corruption.If Rs 41 Crore(lot of money in the 80's) was paid just as commissions,imagine how much the real power brokers in Delhi made.
  6. Parthy

    Parthy Air Warrior Senior Member

    Aug 18, 2010
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    They make the law and approve it.. If a law is against their will or affecting them, do you think it will get passed?? Our Indian constitution has designed greatly to serve not a common man, to serve the F***ing Politician..

    You design a bill to hike their salary and conveyance to another 300%, the bill will get passed in 1 week..... :angry_10:
  7. SHASH2K2

    SHASH2K2 New Member

    May 10, 2010
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    Bihar, BanGalore , India
    New Delhi: Following is the chronology of events in the Bofors Howitzer pay-off scandal:

    March 24, 1986: A $15 billion contract between the Indian government and Swedish arms company AB Bofors is signed for supply of over 400 155mm Howitzer field guns.

    April 16, 1987: Swedish Radio claims Bofors paid kickbacks to top Indian politicians and key defence officials to secure the deal.

    April 20, 1987: Then Prime Minister Rajiv Gandhi assures the Lok Sabha that no middleman was involved and no kickbacks were paid.

    Aug 6, 1987: Joint Parliamentary Committee (JPC) set up under B Shankaranand to probe allegations of kickbacks.

    July 18, 1989: JPC report presented to Parliament.

    November 1989: Congress defeated in Lok Sabha election.

    Dec 26, 1989: Prime Minister V.P. Singh's government bars Bofors from entering into any defence contract with India.

    Jan 22, 1990: Central Bureau of Investigation (CBI) registers complaint in the case.

    Jan 26, 1990: Swiss authorities freeze bank accounts of Svenska and AE Services, which allegedly received unauthorised commissions for the deal.

    Feb 17, 1992: Journalist Bo Anderson's sensational report on the Bofors payoffs case published.

    December 1992: Supreme Court reverses a Delhi High Court decision quashing the complaint in the case.

    Feb 9, 1993: Supreme Court rejects former Bofors agent Win Chadha's plea for quashing the letters rogatory sent by the trial court to its counterpart in Sweden seeking assistance in the case.

    July 12, 1993: Swiss federal court rules that India was entitled to Swiss bank documents pertaining to kickbacks.

    July 29/30, 1993: Italian businessman Ottavio Quattrocchi, who represented Italian fertiliser firm Snam Progetti for years, leaves India to avoid arrest.

    Jan 21, 1997: After four years of legal wrangles, secret documents running into over 500 pages given to Indian authorities in Berne.

    Jan 30, 1997: CBI sets up special investigation team for the case.

    Feb 10, 1997: CBI questions ex-army chief Gen Krishnaswamy Sundarji.

    Feb 12, 1997: Letters rogatory issued to Malaysia and United Arab Emirates (UAE) seeking arrest of Quattrocchi and Win Chadha.

    May 1998: Delhi High Court rejects Quattrocchi's plea for quashing of 'red corner' notice issued by Interpol at CBI request.

    Oct 22, 1999: CBI files first chargesheet naming Win Chadha, Quattrocchi, former Indian defence secretary S K Bhatnagar, former Bofors chief Martin Ardbo and Bofors company. Rajiv Gandhi's name figures as "an accused not sent for trial" -- as he was assassinated in 1991.

    Nov 7, 1999: Trial court issues arrest warrants against Quattrocchi, while summoning other four accused.

    Dec 13, 1999: CBI team goes to Malaysia to seek extradition of Quattrocchi; fails.

    Early 2000: Quattrocchi approaches Supreme Court to quash arrest warrant against him. The court asks him to appear before the CBI for interrogation while protecting him from being arrested. Quattrocchi refuses to accept the order.

    March 18, 2000: Chadha comes to India to face trial.

    July 29, 2000: Trial court issues "open non-bailable arrest warrants" against Ardbo.

    Sep 4, 2000: Chadha moves Supreme Court for permission to go to Dubai for treatment. Supreme Court rejects plea.

    Sep 29, 2000: Hindujas issue statement saying funds received by them from Bofors had no connection with the gun deal.

    Oct 9, 2000: CBI files supplementary chargesheet naming Hinduja brothers as accused.

    Dec 20, 2000: Quattrocchi arrested in Malaysia, gets bail but is asked to stay in the country.

    Aug 6, 2001: Former defence secretary Bhatnagar dies of cancer.

    Oct 24, 2001: Win Chadha dies of heart attack.

    Nov 15, 2002: Hinduja brothers formally charged with cheating, criminal conspiracy and corruption.

    Dec 2, 2002: Malaysian court denies India's request for Quattrocchi's extradition.

    July 28, 2003: Britain freezes Quattrocchi's bank accounts.

    Jan 4, 2004: Swiss authorities agree to consider CBI request to provide Quattrocchi's bank details.

    Feb 4, 2004: Delhi High Court clears Rajiv Gandhi of involvement in scandal.

    May 31, 2005: Delhi High Court clears Hindujas of involvement.

    Dec 31, 2005: CBI tells Crown Prosecution Service (CPS), London, that it has not been able to link the money in two accounts of Quattrocchi with Bofors kickbacks.

    Jan 7, 2006: Two accounts of Quattrocchi in London banks containing 3 million euros and $1 million are defreezed after then additional solicitor general B. Dutta met CPS lawyers.

    Feb 6, 2007: Quattrocchi detained in Argentina on Interpol lookout notice.

    Feb 13, 2007: CBI writes to ministry of external affairs for Argentinean Extradition Act and tells Interpol that documentation are being prepared for extradition proceedings.

    Feb 24, 2007: Fresh arrest warrant against Quattrocchi obtained from Delhi court.

    Feb 26, 2007: Quattrochhi released on bail with condition that he does not leave Argentina.

    Feb 28, 2007: Two-member CBI team leaves for Argentina.

    March 1, 2007: Argentinean judge examines CBI application seeking Quattrocchi's extradition.

    March 23, 2007: Hearing of extradition plea begins in Argentine court.

    June 8, 2007: Court in El Dorado rejects extradition request.

    October 2008: Attorney General Milon Banerjee opines that CBI can withdraw Red Corner Notice against Quattrocchi.

    Nov 25, 2008: Red Corner Notice withdrawn.

    April 30, 2009: CBI seeks time from trial court to decide future course of action against Quattrocchi.

    Sep 8, 2009: CBI seeks two weeks' time from trial court to explore options against Quattrocchi.

    Sep 29, 2009: Government tells Supreme Court about decision to withdraw case against Quattrocchi.

    Dec 14, 2010: A Delhi court reserves order till January 4, 2011 on a plea of CBI seeking to drop criminal proceedings against Quattrocchi.

    Jan 3, 2011: An Income Tax tribunal rules that commission in violation of Indian laws was indeed paid to Quattrochi and Chadha in the gun deal that cost the national exchequer Rs. 412.4 million some 23 years ago.

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