March 19, 2018

National Herald case: Delhi HC orders Young Indian to deposit Rs in Income Tax recovery notice of Rs.250 crores

In the National Herald case, the Delhi HC directs Young Indian to deposit Rs.10 crores first in their petition against the Income Tax order

By Team PGurus -


March 19, 2018


In the National Herald case, the Delhi HC directs Young Indian to deposit Rs.10 crores first in their petition against the Income Tax order

In a big setback to Sonia Gandhi and Rahul Gandhiin the National Herald case, the Delhi High Court (HC) on Monday directed their company Young Indian to deposit Rs.10 crores ($1.67 million) first in their petition against Income Tax (IT) recovery notice of Rs.249.15 crores. The bench of Justices S Ravindra Bhat and A K Chawla directed the company to deposit half the amount with the Income Tax department before March 31 and the remaining Rs.5 crores by April 15th.

The IT department has declared that Congress party’s claim of giving Rs.90 crore loans to the newspaper was a total sham and a wrong claim to facilitate Gandhi family-controlled company Young Indian to dubiously take over the ownership of the lands and buildings across India.

The High Court said that subject to the deposit of the amount, the tax authorities shall not enforcethe demand of Rs.249.15 crores made on the company for the assessment year 2011-12.  The High Court also sought the IT department’s response to Young Indian’s (YI) plea challenging the demand and the proceedings emanating from it and listed the matter for further hearing on April 24.

Senior advocate Arvind Datar, appearing for Young Indian, told the court that it will have extreme difficulty in raising Rs.10 crores and sought the amount to be fixed at Rs.7.5 crores.  He said that the amount was being collected from contributions by individuals and it would, therefore, be tough to get more money.  He also urged the bench to allow the company to deposit the amount in court, saying it was extremely difficult to get a refund from the IT department.

Advocate Ashish Jain, representing the IT department, opposed the oral pleas made on YI’s behalf and said the company had to actually deposit Rs.49 crores, 20 percent of the demand, for its appeal to be heard.  The bench refused to grant both the pleas made orally on behalf of Young Indian and directed it to deposit Rs.10 crores with the IT department. The High Court also directed the tax authorities to expeditiously hear YI’s appeal against the assessment order.

On December 27, 2017, the Income Tax Department’s Assessment Order found that Young Indian had hushed up a taxable income[1] of more than Rs.414 crores ($40 million). While Congress leadership has kept silent[2] on this devastatingIncome Tax Order exposing the frauds in the National Herald case, after some weeks, BJP leader and main petitioner Subramanian Swamy produced a copy of this Income Tax Order[3] in the trial court. Even the advocates representing Sonia and Rahul were unaware of this Income Tax Order.

The IT department has declared that Congress party’s claim of giving Rs.90 crore loans to the newspaper was a total sham and a wrong claim to facilitate Gandhi family-controlled company Young Indian to dubiously take over the ownership of the lands and buildings across India. The 105-page Income Tax Assessment Order has declared that Sonia and Rahul Gandhi controlled Young Indian’s actual taxable income is more than Rs.414 crores and canceled the firm’s tax exemption certificate.

The Income Tax, in its detailed Assessment Order described the takeover of erstwhile National Herald newspaper publishing company Associated Journals Limited (AJL) by Young Indian as “premeditated scheme of tax evasion”, adventure, fraudulent, involved in hawala nature activities etc.

After this order, IT fined and issued a recovery notice for Rs.249.15 crores ($40 million) from Young Indian. The company controlled by Sonia and Rahul with 76 percent shares, has approached the High Court seeking a direction to stay the recovery of the demand of tax and interest of Rs 249.15 crores, raised following a notice of December 27, 2017, issued under section 156 of the I-T Act for the assessment year 2011-12.

It has also challenged the order of the IT authorities rejecting the firm’s application and sought a stay on the direction to pay Rs.49.83 crores ($8 million), that is 20 per cent of the total disputed outstanding demand.

1. The conversion rate used in this article is 1 USD = 65 Rupees.


[1] IT fixes Sonia-Rahul firm Young Indian for Rs.414 crore gains from National Herald frauds – Jan 20, 2018,

[2] The silence of Congress on the Income Tax Assessment Order in National Herald case is deafening – Jan 24, 2018,

[3] National Herald case: Read 105-page IT Assessment Order against Young Indian exposing Rs.414 crores gain – Jan 22, 2018,

Indialogue Newsletter , excerpt

Indialogue Newsletter
By Aman Thakkar


Worsening India-Pakistan Relations Amid Allegations of Harassment of Diplomats

India and Pakistan have traded accusations over mistreatment and harassment of their diplomats, with each alleging that the other is behind the harassment. India has alleged that vehicles from high commission, including that of the High Commissioner himself, in Islamabad have been forcibly stopped, a contractor who maintains the Indian chancery building has been threatened, and that an Indian official’s home in Islamabad was broken into and a laptop stolen. Meanwhile, Pakistan hasalleged that Pakistan’s deputy high commissioner’s children were stopped on their way to school, and that the car of another diplomat was “chased and scratched” in New Delhi. Among the more ridiculous (yet irritating) harassing has been the accusation of ringing the doorbell in the middle of the night and running away in both Islamabad and New Delhi.

Why this Matters?: Looking beyond the acts of harassment (as ridiculous as some of them might be), this exchange actually underscores worsening ties between India and Pakistan. New Delhi has reported 633 ceasefire violations (CFVs) by Pakistan in the roughly two and a half months in 2018. That’s a new high, and harassment of diplomats only makes any attempts to improve relations or facilitating discussions even more difficult.

India’s Army Has No Money to Modernize At a Time It Desperately Needs To

In a report to the Parliamentary Standing Committee on Defence, the Indian Army said that the central government had not allocated enough money to pay for emergency purchases that it made in the aftermath of the Uri attack in 2016, the surgical strikes against Pakistan that followed the attack, and the Doklam standoff against in China last year. Vice Chief of Army Staff Lt Gen. Sarath Chand said that the funds allocated by the central government this year, totalling Rs 21,338 crore ($3 billion) would not even cover the installment payments for past purchases, which total Rs 29,033 crore ($4.46 billion). The Vice Chief of Army Staff went on to say that the goal of the army was to have “one-third of its equipment in the vintage category, one-third in the current category and one-third in the state of the art category. As far as we are concerned, the state today is 68% of our equipment is in the vintage category, with just about 24% in the current, and 8% in the state of the art category.”

Vice Chief of Army Staff Lt. Gen. Sarath Chand

Expert Round-Up

Manu Pubby writes that “the Indian defence budget is now dangerously skewed as the revenue bill has zoomed over the years. The sustained manpower-intensive nature of the services has resulted in a situation where resources available for modernisation of the forces are far outstripped by the money required to pay salaries and pensions to soldiers.”

Ajai Shukla notes that “The pared down capital allocations this year are not a one-off case. A summary of previous years’ projections and actual allocations illustrates that this has been the pattern of the past as well.”

Saikat Datta argues that “Insiders say the “hollowness” is so deep that the Indian Army barely has reserves to fight a war for more than one week. In 2012, the then Chief of Army Staff, General V. K. Singh, wrote a Top Secret letter to Prime Minister Manmohan Singh, pointing out that the Indian Army could not fight a war beyond three days. Things are much worse now, India’s top generals insist.”

TDP Cuts Ties with BJP, To Motion for Vote of No Confidence

Last week’s Indialogue analyzed the public spat between the BJP and its regional ally in Andhra Pradesh, the Telegu Desam Party, over special category status for the state (If you missed it, please read here). Since, the TDP has decided to officially pull out of the BJP-led coalition, the National Democratic Alliance, and will motion for a vote of no-confidence against the government. A motion of no confidence is a vote to decide whether the elected Parliament has confidence in the government and its head, in this case Prime Minister Modi. Modi’s government is likely to survive this motion. The BJP has 274 members, more than the majority mark of 270, and enjoys the support of several allies despite the TDP’s 16 MPs leaving the coalition.

Bigger Picture: A vote of no-confidence, while not a threat to the BJP government, could be embarrassing if the TDP is joined by a number of other parties in a public show of dissatisfaction with the government. Moreover, it would underscore the BJP’s lack of support in the Southern states in India, where regional parties and, to some extent, the Indian National Congress remain more dominant. As we look to the upcoming general elections in 2019, signs of growing anti-incumbency sentiment in the BJP’s base, as well as growing discontentment in the South is something to keep in mind.

Prospects of an Indian Attempt to "Reset" Ties with China Escalate

Last week’s Indialogue also discussed a third attempt by the Modi administration to reset relations with China ahead of Prime Minister Modi’s visit Shanghai Cooperation Organization (SCO) summit (read last week’s brief here). Reports later emerged that a slew of bilateral meetings have been planned for coming months. External Affairs Minister Sushma Swaraj is expected to visit China for the SCO’s Foreign Ministers’ meeting. However, her visit could also include bilateral engagements with Chinese Foreign Minister, Wang Yi, while she is there. Her visit will reportedly be followed immediately by a visit from Defence Minister Nirmala Sitharaman. Officials have noted that the back-to-back nature of these visits is supposed to signify a significant commitment to improving ties.

Indian Minister of Defence Nirmala Sitharaman (left) and Minister of External Affairs Sushma Swaraj (right)

Insight: This reset in relations comes after a turbulent year in Indo-China relations, but the deficit of trust between the two countries remains high.

Analysts note that India supporting China’s candidacy for the vice-presidency of the Financial Action Task Force (FATF) and asking government officials to skip all events to mark the Dalai Lama’s 60 years in exile is a price too high for normalized relations with a country that continues to encircle India and challenge it in its own neighborhood. Others argue India cannot afford a conflict with China. See the above story on the woeful state of India’s army to underscore just how bad conflict with China could become if a standoff like Doklam were to take place again and become violent.

Regardless of this most recent development, I still argue that India and China need a new and broad framework for engagement despite disagreements, or a new modus vivendi, rather than a simple reset in ties. I’m currently writing an article for The Diplomat putting forth this argument, so please look out for that in the coming weeks.

Stories you might enjoy:

Abhijnan Rej undertakes a detailed study of the prospect of a two-front war (where China and Pakistan would join forces to fight India), and finds that the “force ratio – never in India's favour to begin with – is currently rapidly shifting in favour of the adversary, even after considering smaller fractions of the Chinese military involved in a two-front conflict.”

Pallavi Aiyer argues “the India-Japan economic relationship remains underwhelming both in relation to its potential, and to the ties that each nation shares with China.”

Jeff M. Smith writes “the Free and Open Indo-Pacific represents a specific vision for a rules-based order governing one of the world’s most dynamic regions — an order the United States and the Quad view as increasingly under duress from a more assertive and ambitious China.”

Beena Sarwar says that a recent agreement between India and Pakistan “on prisoner exchanges gives hope that the space thus gained can be opened further with more focus on low-hanging fruits. A major step towards re-gaining normalcy in relations would be to ease the visa process and allow people to meet.”

Sushant Singh writes “The government is unable to find an estimated Rs 2.1 lakh crore that is needed to construct four ‘priority’ strategic railway lines on the China border...These four ‘priority’ lines are part of the 14 strategic lines which were identified for development in November 2010, among the 28 railway lines in border areas approved ‘in principle’ by the Defence Minister in January 2010.”

March 18, 2018

Arun Jaitley must speak on the tainted firm Gitanjali Gems of the PNB Scam engaging daughter’s legal firm

Arun Jaitley must break his silence over the PNBscam

By Sree Iyer -


March 18, 2018


Arun Jaitley must break his silence over the #PNBscam.

The normally eloquent Finance Minister (FM) Arun Jaitley seems to have lost his voice over the expose of his daughter Sonali Jaitley’s law firm’s link with the Punjab National Bank (PNB) scam-tainted Gitanjali Gems Limited.  First, a pre-emptive article appeared in OpIndia[1] that The Wire is going to do hit-job journalism on Jaitley’s daughter. After this, The Wire[2] comes out with the story that the law firm Chambers of Jaitley and Bakshi, now run by daughter Sonali and husband Jayesh Bakshi accepting that they engaged legal services contracts with fugitive Mehul Choksi’ firm and returned their contracts.

It is a known secret in the legal world that a Retainership Fee is a euphemism for huge sums given by Corporates to powerful politicians-cum-lawyers or their kin.

Then came the accusation by Congress President Rahul Gandhi. In a scathing attack, Rahul said that CBI should raid Jaitley’s daughter’s law firm:

Still, Arun Jaitley has gone into mute mode. The FM has no qualms wading into matters of Defence (the FIR  that his alleged protégé approved against an Army Officer) during his video conversation with Navika Kumar for ETNow on the 2018 Budget[3]. Then why the silence on a matter that is so close to home? What is he trying to hide? According to the daughter’s law firms’ reply to The Wire, they were engaged by the tainted Gitanjali Group in December 2017 and returned the contract as soon as the news item appeared about the bank scam.  Arun Jaitley’s daughter, her husband, and son are not legal eagles by any stretch of the imagination and are not that visible in any courts.  Then why did the fugitive Mehul Choksi approach them? At the risk of stating the obvious, the only answer one can arrive at is that their father is the country’s Finance Minister.

Though uncle Mehul Choksi’s dealings were doubtful from 2014, his activities came into the public domain only after his nephew Nirav Modi got exposed. All escaped during the first week of January 2018. Punjab National Bank filed a complaint to CBI on January 29, 2018, and a First Information Report (FIR) was registered the next day. As per the FIR, the bank frauds started from January 2017.

How much was the legal fee or retainership fee paid by the Gitanjali Group to engage daughter Sonali Jaitley’s firm? Arun Jaitley must explain as to why a tainted firm approached his daughter’s legal firm. Is this a one-off legal contract with them or were they engaging Sonali’s firm before too? The Bharatiya Janata Party (BJP) leaders made a hue and cry[4] over Congress leader Abhishek Singhvi’s wife’s firm being a shop owner of Nirav Modi’s showroom in Mumbai and wife’s purchasing discount on diamonds.

What is interesting about this is that the allegations were leveled by the Defence Minister Ms. Sitharaman, who will hit an InstantMute button if asked about the FIR she approved, in her own ministry! Mr. Modi, what is wrong with your cabinet members? If they can’t speak for their own department, what gravitas do you think they will have with the readers/ viewers when they wade into other ministry matters? Surely, if Jaitley had spoken about the PNBScam sooner to the media, the fallout could have been contained. Was the contract of his daughter’s legal firm the reason for his silence?

It is a known secret in the legal world that a Retainership Fee is a euphemism for huge sums given by Corporates to powerful politicians-cum-lawyers or their kin. Why are Corporates paying such a huge fee, which looks like a hafta payment to VIPs or their kids? Is this a glorified kickback to look the other way?

Finance Minister Aun Jaitley must clear the air. He can’t act like an Ostrich on this exposé of tainted companies engaging in legal contracts with his daughter’s firm.


[1] After Amit Shah and Ajit Doval, is ‘The Wire’ planning to target Arun Jaitley and his daughter with a shabby hit job? Mar 9, 2018,

[2] When a Pre-Emptive Strike becomes a Self-Goal– Mar 11, 2018,

[3] Watch: Arun Jaitley frankly share his thoughts on Budget 2018 – Feb 3, 2018,

[4] PNB fraud: BJP alleges Abhishek Singhvi’s wife has shares in Nirav Modi’s firm, Cong warns of legal action – Feb 17, 2018, Indian Express

March 17, 2018

Book Review: “The Rohingyas: Inside Myanmar’s Genocide”

Usman Butt

March 14th, 2018

There are many groups who can claim the dubious honor of being the world’s forgotten people, but Myanmar’s ethnic Rohingya population is arguably the current front-runner for the label. Over the last several years, the plight of the Rohingya has occasionally made it into the international news. But, the global community has done little to intervene in the ongoing genocide.

For the most part, there has been confusion about who the Rohingya are and why they are being targeted by the Myanmar regime. Azeem Ibrahim, an international research fellow affiliated with Harvard, Yale, and the U.S. Army War College, argues that the persecution of the Rohingya is historically rooted in the situation of postcolonial Myanmar and the normalized “otherness” of the Rohingya people within the country’s culture. Ibrahim’s new book The Rohingyas: Inside Myanmar’s Genocide traces this troubling history of persecution and explains its origins.


As the book recounts, there is a popular belief in Myanmar that the Rohingya are Bengalis who came to Arakan province (also known as Rakhine province) in western Myanmar after the British annexed the region in 1824, and that they displaced the local Buddhist population. In addition to being a so-called alien population, it is frequently assumed that the Rohingya are dangerous and a vehicle for Islamist extremism. These prejudices have been encouraged by Myanmar’s ruling military and political elite through the media and education system.

Ibrahim argues that popular beliefs about the Rohingya are incorrect and that their history in the Arakan region dates back to migration from India to Arakan 3,000 years ago. The Rohingya became the region’s majority group, coexisting with other populations, including Buddhists. After Islam arrived in India, it quickly came to Arakan, which was an important trading region. Arakan had been a largely independent region and only became part of Myanmar when the Kingdom of Burma (a precursor to the Myanmar state) expanded and took the area in 1784.

After the British annexed the region in 1826 and the rest of Burma in the following decades, they ruled over an ethnically and religiously diverse Burma. Over time, British rule would divide Burmese society. Some groups favored British rule, while others did not. This division sharpened when the British brought in Indians, some of whom were Muslim, to work in the local administration and run rice fields. Even though the Rohingya never joined the British administration en masse, the rest of Burmese society conflated foreign Muslims with local ones, a phenomenon that likely played a role in contemporary discourse on the Rohingya in Myanmar.

The Second World War worsened relations between the country’s ethnic communities, as different groups choose between the British and the Japanese, who were competing for control of the region. Hoping to rid themselves of the British, many Burmese sided with the Japanese. The Rohingya, however, decided to remain loyal to the British, which caused friction between them and the Rakhine (Burmese Buddhists), who were committed to the nationalist cause of liberating Burma from British rule. Siding with the British was not an ideological commitment to empire, but rather came naturally as the Rohingya had gotten accustomed to the British during their long-time rule. By the end of World War II, a new nationalist elite had formed in Burma and eventually forced theBritish out. The formation had been gradual and included different factions and elements from left to right-wing groups. Some within these movements were aided with a British education, which was meant to train them to be administrators, but like elsewhere in the British Empire, local elite formed to oppose the empire.

After Burma became an independent country in 1948 (and changed its name to Mynamar in 1989, allegedly to be more ‘inclusive’ of the countries minorities), ethnic diversity and fears about holding the country together accelerated the search for a common identity. As Ibrahim argues, because of the country’s Buddhist majority, Buddhism quickly became an important marker of belonging in Myanmar. Still, debates over whether the country should be a secular or Buddhist state raged until the 1960s, when the military took full control of the government and promoted Theravada Buddhism, whose followers claim to be strict adheres to Buddha’s teachings. It is a fundamentalist movement with an emphasis on purity. while it generally abhors violence, its strict and reductive ideas appeal to nationalists trying to nation build. Notwithstanding these debates, throughout the history of post-independence Myanmar, from civilian to military control, communism to democracy, one thing remained constant: the Rohingya were marginalized and oppressed, to varying degrees, by all the country’s ruling regimes.

Ibrahim argues that one of the key motivating factors for targeting the Rohingya was failing economic and political policies under Myanmar’s successive governments. These failures sparked hostile government rhetoric against the Rohinghya, with the intent of distracting the rest of the population from the government’s shortcomings. The Rohingya were an easy target for such scapegoating, as they were known not to actively resist or oppose their persecution.

Recent attempts to wipe out the Rohingya demonstrates how successful this targeting has been, Ibrahim argues. Whether through propaganda, emphasis on ‘officially’ approved history (which casts Rohingyas as dangerous foreigners), or the use of war-on-terror rhetoric that portrays the Rohingyas as Jihadists, while banning the Rohingyas from voting in elections, state sponsored marginalization has come full circle with recent events.

Ibrahim’s book is a welcome contribution to our understanding of the ethnic cleansing taking place in Myanmar. Accessible and requiring no prior knowledge, it is required reading for anyone who wants to learn more about the plight of the Rohingya