An income tax tribunal has said that kickbacks of Rs41 crore were paid to 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.
The Bofors scandal is back to haunt the Congress. For a party battling a series of corruption allegations, this could not have come at a worse time. The income tax (I-T) tribunal has claimed that Ottavio Quattrocchi, the Italian businessman close to the Gandhi family, and the late Win Chadha, an agent of the Swedish arms manufacturer AB Bofors, received Rs41-crore ‘commission’ in the Rs1,500-crore howitzer gun deal.
The tribunal’s verdict has once again put a question mark on the CBI’s investigation and its demand for closure of the case in October 2009. The agency’s petition in court seeks withdrawal of the case against Quattrocchi on the grounds that there is no evidence against him and that persisting with the case against him will serve no purpose.
The tribunal was hearing a plea filed by Chadha’s son against the I-T department’s claim of Rs52 crore and Rs85 lakh from his father for the assessment years 1987-88 and 1988-89 respectively. “Payments were made illegally as the Government of India’s policy did not allow middlemen in defence deals,” the tribunal said, adding both are liable to pay income tax on the bribe money they got while living in India.
“Despite the government’s directive not to appoint or pay any agent, Bofors entered into a fresh agreement with AE Services Limited of the UK in November 1985 at the behest of Quattrocchi. The tribunal noted that 242.62 million Swedish kroners were paid to Quattrocchi and Chadha in kickbacks. The bribes were paid into the accounts of M/s Colbar Investments Limited Inc and M/s Wetelsen Overseas, controlled by Quattrocchi and his wife Maria. The kickback was paid by M/s AB Bofors as commission to Quattrocchi and Chadha through M/s AE Services and M/s Svenska,” it said. Turn to p15
The I-T probe also revealed that Bofors did not disclose its deal with AE Services in its communication with the ministry of defence. Investigations show that Quattrocchi was instrumental in bringing about the agreement between AE Services and Bofors. It has emerged that on September 3, 1986, Bofors remitted a sum of $7.34 million to a Swiss bank account of AE Services. From this account, an amount of $7.12 million was transferred to an account in the name of M/s Colbar Investment Limited, Panama. That account was also with a Swiss bank in Geneva.
I-T department Investigations also indicate that Chadha and Quattrocchi transferred the funds received from Bofors frequently from one account to another and from one jurisdiction to another to avoid detection and to obliterate the trial of the money.
The tribunal referred to a 1992 order of the Supreme Court saying that enough evidence, including a joint parliament committee’s report, nail Chadha. “It cannot be said that the report of the JPC has acquitted the respondent and others of all the charges levelled against them in appraisal of the entire evidence. It will be relevant to mention that the Swiss courts have also agreed about the commission of this crime. There is sufficient material to show that Win Chadha was recipient of commission amounting to Rs52,60,34,469 through its front company namely M/s Svenska Inc, Panama.”
Quattrocchi, who was known to be close to the Gandhi family, left India in 1993 even as a CBI case was filed on kickbacks in the deal. The other accused — Chadha, former defence secretary SK Bhatnagar and Bofors chief Martin Ardbo — are dead.
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