The Telegraph
Since 1st March, 1999
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Chidambarams in damage control
- Husband announces appeal, wife returns fee
Nalini Chidambaram

New Delhi, Aug. 30: P. Chidambaram fought the fire in Delhi. Mrs Chidambaram did so in Chennai.

The finance minister told the Lok Sabha today that the income-tax case that his wife Nalini lost would be pursued in the Supreme Court. The income-tax department would file an appeal against the high court order that went in favour of 43 mills.

In Chennai, sources said Nalini, the tax department’s counsel, has returned the appearance fee of Rs 1 lakh. The sources said Nalini returned the fee to the department four or five days ago.

Chidambaram’s announcement on the appeal came as the Opposition continued to insist that an impropriety was committed by the tax department, which functions under the finance minister, by hiring his wife as lawyer in a case that caused revenue loss to the government.

Chidambaram, who rose to defend himself in Parliament for the second day today, dismissed the charge that Sri Karpagambal Mills Limited, said to be owned by his brother, was among the 43 mills.

“The insinuation is false. Forty-three mills were involved in the case before Madras High Court and Sri Karpagambal Mills does not figure on the list of 43 mills,” Chidambaram said, adding that the Central Board for Direct Taxes has also clarified this point.

He said the case in which Nalini had appeared involved a “pure question of law” ' whether expenditure on replacement of machinery would be accounted as revenue expenditure or capital expenditure ' and the question was decided by the Supreme Court as early as in 1967.

However, the BJP remained dissatisfied with the minister’s statement and walked out. “We have decided to raise the issue vociferously in both the Houses,” said Vijay Kumar Malhotra, spokesperson for the BJP Parliamentary Party.

But the monsoon session ended today and the BJP did not make it clear whether it would pursue the issue outside Parliament.

The House witnessed noisy scenes before Chidambaram made his statement with the Rajya Sabha adjourning twice.

The Left remained silent in Parliament but outside, CPM leader Sitaram Yechury said: “Caesar’s wife should be above reproach.”

In his prepared statement in the Lok Sabha, Chidambaram said: “The department seems to have decided to re-agitate the matter.”

He added that the department had two weeks ago sent papers to law officials to file an appeal before the apex court.

The minister said the principle of law laid down in the case does not apply to textile mills alone, but to all companies and firms like paper mills, steel mills and sugar mills, which replaced machinery.

Chidambaram added: “I believe that none of my respected colleagues in the House would seriously think that had the matter been brought to my notice, I would have allowed it to proceed an inch further.”

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