Government examining tax tribunal ruling in Bofors case: Pranab Mukherjee

Finance minister Pranab Mukherjee on Tuesday said that the government is examining the decision of the Income Tax tribunal in the Bofors case and will decide the future course of action later.

"As the law ministry has pointed (out), we are examining the (Bofors) papers. After that it will be seen," he told reporters when asked about the future course of action by the government on the recent ruling of the Income Tax Appellate Tribunal (ITAT) in the Bofors case.

In its ruling, the ITAT had said that kickbacks of Rs61 crore were paid to the late Win Chaddha and Italian businessman Ottavio Quattrocchi in the Howitzer gun deal and they are liable to pay tax in India on such income.

The order further said, "... 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."

While responding to BJP allegations of corruption against the Congress in the Bofors case, law minister M Veerappa Moily had said yesterday, "I don't think there is any issue to be made out. As far as the order is concerned, we will look into it."

In the order, the tribunal details the denials by gun-maker Bofors about the existence of middlemen in the 1986 deal valued at Rs1,437 crore and the efforts by Quattrocchi and Chaddha 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 total contract value, the tribunal observed that the government had to pay an excess amount of about Rs 41 crore, which was passed on to Chaddha and Quattrocchi in violation of the terms of the contract.

Quattrocchi, known to be close to the Gandhi family, left India in 1993 even as a CBI case was filed over kickbacks being paid under the deal.