I-T dept directs Robert Vadra to pay Rs 25 crore in back taxes
Daily Hunt, June 25, 2018
By passing off a good business deal as a long term investment, Robert Vadra, the beleaguered son-in-law of Congress leader Sonia Gandhi, managed to evade taxes in one year alone to the tune of a whopping Rs 43 crore.
An evasion on which he now has to pay Rs 25 crore as taxes after having lost the case to the tax department in the Supreme Court.
The assessment order, a copy of which has been accessed by India Today, also details how Vadra got an overdraft facility of Rs 7.9 crore from Corporation Bank when the company's bank balance was a mere Rs 1 lakh. The New Friends Colony branch of the bank had, at that point, denied giving any overdraft to Vadra's Skylight Hospitality private limited.
Vadra's Skylight Hospitality had declared an income of nearly Rs 40 lakh for the assessment year 2010-2011. However, after a reassessment, the office concerned decided to treat capital gains as business income.
"Vadra's firms are into buying and selling of land which is a pure business decision. But his tax declarations showed that these are long term investments he had made. While the former attracts a 30 per cent tax, the latter gets the benefit of indexation (of the property) as well as long term capital gains which is not more than 20 per cent. Now he will have to pay the difference which works out to Rs 25 crore including interest for the past seven years,"said an official of the tax department.
"There is no tax on capital gains on the sale of agricultural land if it is 8 km away from the urban limits of a city", the official added.
In Vadra's case, his land deals were mainly in Congress-ruled Haryana and Rajasthan. Vadra bought agricultural land and sold it to the DLF group for a huge margin.
In one deal, Vadra bought a property at Mauja Shikohpur near Manesar in Haryana for Rs 7.9 crore and sold it for Rs 58 crore to DLF Hospitality.
The tax notice says, "After considering the facts, the undersigned comes to the same conclusion of the assessing officer that the real intention of the assessee of entering into a business venture with DLF is the objective of making profits. The assessee has never intended to acquire this property for the purpose of investment. The intention of the assessee company is to get good returns within a short span of time. In view of this, the profits earned by the assessee company on the sale of the land cannot be treated as long term capital gains."
Interestingly, Vadra went to court on the ground that the reassessment notice was issued to an entity named Skylight Hospitality Pvt Ltd which did not "exist on the date of issue of notice". The company had by then converted itself into an LLP or Limited Liability Partnership.
The court threw this objection out on the grounds that during the assessment year, the company was not an LLP but a private limited company.
Interestingly, the tax notice also exposes an earlier statement made by the New Friends Colony branch of Corporation Bank. It appears that Vadra bought the Manesar village land from Omkareshwar Properties for Rs 7.95 crore but the buyer never encashed the cheque.
"The actual payment was made after 7 months by another cheque issued by the assessee. It is very rare where a buyer encashes the sale consideration almost six months after the sale".
The bank balance of Skylight Hospitality at the time of issuing the Rs 7.95 crore cheque was only Rs 1 lakh.
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