The National Herald Relaunch, Congress Upbeat

Steps are being taken by Congress and Gandhi’s’ to relaunch The National Herald daily started during freedom struggle by the first Prime Minister and was mired in legal tangles.

Bengaluru:  The National Herald which was mired in controversies and court cases will be launched on June 20 by the President Pranab Mukherjee. The paper which was launched by Jawaharlal Nehru in 1938 became the centre of a legal tangle for the Gandhis’ recently.

However, the Congress decided to relaunch the paper and as a first step, Rahul Gandhi and several other Congress leaders released a commemorative edition titled, “India at Crossroads: 70 years of Independence,” on Monday afternoon in Bengaluru.

#National Herald Live became a top trend on Social media on Monday.

Last year, the newspaper returned with a digital version eight years after its digital version. It was shut down eight years ago with an alleged unpaid debt of about 90 crore rupees. The print edition is expected to be launched in New Delhi as a weekly on June 20th by President Mukherjee.

Allegations were levelled against The National Herald that the Gandhi family set up Young Indian Company to buy the newspaper’s debts using Congress Party funds and illegally acquired properties worth 5,000 crores belonging to the news paper.

Last month, Delhi High Court refusing to stop an investigation by Income Tax Department into Indian asked Congress to approach the Income Tax Assessing Officer. Meanwhile, BJP described it as a major setback for the Congress.

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Building Real Estate Over The Debris Of Fourth Estate

In the light of the decision of Delhi High Court, Sonia, Rahul and other Congress leaders have to face the trial court and income tax adjudicators in National Herald case.

Viraat from Delhi

Gandhis, the Congress and their income was not taxed. Now in the light of Delhi High Court orders,the IT department wants documents from the Congress, AJL and YIL. Sonia, Rahul and others have to fight before the trial court of IT adjudicators.

“Don’t be arrogant”; this is the counsel given by the Delhi High Court to the Congress leaders.  It was clearly told that Sonia Gandhi and Rahul Gandhi have to fight the legal battle before trial court or IT adjudicators.  The bench of S Muralidhar and Chander Shekhar, JJ, warned the Congress’ spokes person and senior Advocate Abhishek Manu Singhvi either to withdraw or take an order of dismissal. To avoid an adverse order, he withdrew.

The media rightly reported that it was a major setback to two Gandhis. They cannot approach the Supreme Court for revision or appeal. Not even for review before the same court. Because, in the eyes of law, there is no writ petition at all because the petitioner has withdrawn it. Had it been an order on merits, Congress leaders would have scope for appealing as aggrieved parties. A withdrawing party cannot claim to be an aggrieved party.

Is it an issue of Congress Party?

Is it a matter of Congress party or an allegation against two individuals? It is not a party issue at all. Some of the Congress leaders held ‘shares’ in the Young Indians Pvt Limited (YI).  Subramanian Swamy alleged that Gandhis had taken over the assets of Associated Journals Ltd (AJL) which include vast land holdings. AJL shares shifted to YI. Swamy saw conspiracy and cheating behind the YI acquiring AJL, the publishers of National Herald, for Rs 50 lakh. Interestingly, the YI also purchased right to recover a loan of Rs 90.25 crore that AJL owed to Congress.  The Congress party gives loan, the YI collects it back.  The YI purchases AJL for Rs 50 lakh.

The Trial court allowed the Income tax department to proceed with the probe into the Swamy’s complaint. Then it was YI, not Congress party, that approached the Delhi High Court to quash the IT probe as permitted by trial court. Delhi High Court was no ready to quash. A very intellectual lawyer, legal expert Abhishek Manu Singhvi understood the mood of the court and withdrew the petition.

Interest free loan!

The YI took over the AJL but it did not revive the National Herald. Congress gave an interest free loan of Rs 90.25 crore loan to AJL. It has neither newspaper nor income to back the loan. Gandhi’s purchased AJL which has a liability of Rs 90.25 crore just for Rs 50 lakh. But the National Herald has real estate worth Rs 2000 crore. Subramanian Swamy called it conspiracy.

Income Tax department issued a 24-page notice to Young Indian considering Sonia and Rahul as real beneficiaries of the entire transaction.  The notice dated 10 January 2017 alleged that Priyanka played a role in ascertaining that YI comes in control of 100 per cent shares of this company.

The Tax dilemma

The Income Tax department just wants the documents from Congress, AJL and YI to verify these claims to assess their tax.  The YI is challenging the proposed reassessment for financial year 2010-11.Because, the IT wanted to know real income that accrued when company was fully taken over with properties at least worth of Rs 1600 crore.

What is this Rs 50 lakh? Is it charity? The income accrued by investing Rs 50 lakh cannot be disallowed as ‘expenditure’.  The IT doubted this transaction and considered several steps involved in this take over.  For IT, it is “the scheme to take over immovable properties of AJL without paying any taxes on benefits accrued to YI and its majority shareholders”.  The IT considered the following points:

  1. Registered office of AJL was shifted from Lucknow to Delhi and a new company YI was incorporated by some important persons such as Sonia, Rahul, Fenandes and Vora, who were connected with AICC as well as AJL.
  2. The YI had no assets. It has an AICC loan of Rs 90.21 crore, which was shown as sale of loan for a consideration of Rs 50 lakh. The amount was fixed at Rs 90.21 crore in order to ensure that the amount is just sufficient to allot 99 per cent of share of AJL to YI. Rs 1 crore was suspiciously obtained as a loan from a dubious company.
  3. The YI did not carry out any activity consonant with its stated objective but took over real estate business of AJL to its benefit.
  4. Alleged sale of loan of Rs 90.21 crore by AICC to YI have not been proved through documents because assignment of loan was not acknowledged and confirmed by AJL.
  5. Takeover of AJL was complete within 3 months from the date of incorporation of YI, which subsequently shifted to Herald House in Delhi, one of the prime properties of AJL without paying any compensation for use of space.
  6. The YI obtained registration under Section 12A of the Act, which entitled it to exemption on its income on May 9, 2011 so that value of all benefits from real estate business of AJL get tax exemption.
  7. In order to hold 100 per cent shares of AJL by YI, Priyanka Gandhi Vadhra also purchased additional shares through Rattan Deep Trust and Janhit Nidhi Trust.
  8. YI concealed purchase of loan of Rs 90 crore for Rs 50 lakh in its Profit and Loss Account and the same was camouflaged as expenditure on object of YI. It was not disclosed on the ground of being insignificant investment whereas the reason was to hide real transaction.

The Income Tax department is concerned only with the hidden income for its tax purpose. But the angle of conspiracy and criminality is yet another trial, none knows when it  begins and concludes.

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Set Back To Congress In National Herald Case

The Congress party which has seen continuous disappointments in a string of elections held in the country will have to get ready for some serious investigations. Delhi High Court allows Income tax Investigation into Young Indian Private Limited in which Sonia Gandhi and Rahul Gandhi are directors.

New Delhi: As the Presidential elections are fast approaching, major opposition parties are facing setbacks as law agencies are catching up with them. While opposition parties are calling it political witch hunting, these allegations have been in the news for quite some time. It’s only now that the law agencies have taken cognisance of these things and have swung into action.

On Friday, the Delhi High Court gave a green signal for an Income Tax investigation into Young Indian Private Limited in which Congress President Sonia Gandhi and Vice-president Rahul Gandhi are directors.  The company was issued notices for the assessment year 2011-12.

The company will now probably move the Supreme Court.

Young India approached the high court for a direction to stay the IT proceedings and quashing of notices against it with regard to National Herald misappropriation of assets case.

As the Associated Journals Limited which publishes three newspapers including the National Herald was closed in 2008 due to financial losses, the Gandhi family loyalists Dubey and Pitroda have taken it over and floated Young India Private Limited. After two years Rahul Gandhi was appointed as its director.

The Associated Journals Limited was established by Jawaharlal Nehru before he became the Prime Minister of the country.

The accusation was that Sonia and Rahul by paying Rs. 50 Lakh through which Young Indian Pvt. Ltd obtained the right to recover Rs. 90.25 crores which Associated Journals Ltd owed to the Congress, conspired to cheat and misappropriate funds.  Incidentally, Sonia and Rahul Gandhi together hold 76 per cent stake in the Young India Private Limited.

Speaking to a television channel BJP leader and MP Subramaniam Swamy said that these cases will see trial, “Prime Minister Narendra Modi does not do anything, people will say that he only gives speeches.” he said.

In fact, it was Swamy who filed a complaint before the trial court in 2012 alleging that Congress leaders were involved in cheating and breach of trust in the acquisition process of AJL by YIL. If the case progresses, the Gandhis and others will be tried on charges of dishonest misappropriation of property (section 403 IPC), criminal breach of trust (section 406), cheating (section 420) and criminal conspiracy (section 120 B).

The first to react from Congress, spokesperson Randeep Singh Surjewala, said “The Gandhis have the option of approaching the Supreme Court. The I-T department cannot open an onesided investigation. Swamy is not in charge of I-T.”

In the case filed by Swamy, the other accused include Motilal Vora, Oscar Fernandes, Suman Dubey and Sam Pitroda. The court summoned the accused on 26 June 2014 and granted bail to Sonia, Rahul, Vora, Fernandes and Dubey in 2015 as they appeared before it in pursuance with its summons. Only Pitroda was given bail in 2016 when he appeared before the court.

The Associated Journals over a period of time accrued losses as the National Herald’s circulation dropped and finances exhausted. It was closed in 2008 with a debt of Rs. 90 crores.

As it was launched by freedom fighter and first Prime Minister Jawahar Lal Nehru, the Congress party gave the company unsecured, interest-free loans when it was in financial crisis. This went on up to 2010. Later it was taken over by Young Indian Private Limited (YIL).

After the creation of a new company, AJL became a subsidiary of Young Indian by virtue of AJL transferring its entire equity to Young Indian in lieu of YIL owning its Rs. 90 crore debt. Subsequently, Rahul was appointed as its director in December 2010 and Sonia joined as a director in 2011. On the same day Vora and Fernandes were appointed to the Young Indian Board.

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