Tax trouble: Abhishek Manu Singhvi faces Rs 57 crore fine


I-T panel rejects Singhvi’s claim that termites ate his vouchers

After the Rajya Sabha MP failed to furnish documents supporting his claims of expenditure for running his office, the Income Tax Settlement Commission has levied a penalty of nearly Rs 57 crore on Congress spokesman Abhishek Manu Singhvi.

The settlement Commission, which a taxpayer can approach once which is a resolution entity, for immunity from prosecution rejected Singhvi’s plea, while for assessment year 2010-11 to 2012-13 of the tax attributes levying penalty at 100%. On his own Singhvi had approach the panel.

By the high court, the very operation of the order of the Settlement Commission (SC), has been stayed, being bandied around. An authorized representative of Singhvi, Amit Bhandari said in a statement that no order exists and none is operative in law.

The Jodhpur Income Tax Commissioner found that around Rs. 7 crore to Rs. 32 crore high cash withdrawals from Singhvi’s account, who looked into the case. The noted lawyer said these some of which involved cash payment were for paying fees to legal assistants.

The tax department during financial year 2010-11, over the genuineness of the claims which raised concerns- under his head noticed expenses of over Rs 16 crore, but no lists were given. The department also noticed that between January and March a majority of the Payment were made. For instance in 2011, there were total 18,000 vouchers out of which only 1,200 were dated March 31. For the assessment year the amount of expenses claimed for senior professional lawyer is quite unreasonable, before the Settlement Commission the Tax department claimed.

Singhvi could not produce the vouchers for arguing this period that termites, which attack his counsel Mayank Gupta’s office, the records had chomped off. The source of tax department said that argued that, to produce the papers this was a ploy not.

The Congress spokesperson had claimed fee for assessment year 2012-12 and around Rs. 75 lakh subscription, around 8 crore fee for legal assistance and related to books spending and journals of another Rs 75 lakh. As expenses of stationery and printing another Rs. 15 crore was claimed. While he submitted a list of cheque details and name of several persons to whom payment were made, b the tax department most f the summons issued were return and relating to a “negligible” record amount could be confirmed.

Similarly, Singhvi claimed that worth Rs. 5 crore he had purchased laptops, on which as depreciation benefit Rs. 1.5 crore he claimed. The tax department estimated that based on average cost for laptop is Rs. 40,000, for 14 advocates and professionals hired by him the lawyer would have purchased 1,250 laptops.

Description claimed on laptops besides withdrawing the Rs. 1.5 crore, Singhvi offered on 75% of the gross professional fee to pay tax. The tax department argued that for tax senior Court lawyer disclose 95% of their gross professional fee.  For the three assessment years the settlement commission ruled that on 90% of the gross professional receipts the tax department should leave tax as reasonable expenses against professional expenditure after allowing 10%.

Singhvi’s officer said on Tuesday, over a three year period to his declared professional income Settlement Commission had added over Rs. 91.95 crore and slapped a penalty of Rs. 5.67 crore.

Bhandari said, commenting on Singhvi’s behalf that regarding wrongful receipts there was no issue as by cheque 100% receipts are admittedly. Even the wrongly made is only of inflated expenses claimed.

In the last week of September by Singhvi the settlement commission order was received after which he approached the Jodhpur bench of Rajasthan HC which stayed on September 11 the order passes.

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