Are cash entries to ‘VBS’ from Ispat diaries linked to revised ‘income’ from apple orchards, routed to LIC policies?

DELHI: Former Steel Minister Virbhadra Singh — who is already being linked by the Opposition BJP to alleged payoffs from the Pramod Mittal-controlled Ispat Industries — now faces additional questions about unaccounted cash entries emerging from his Income Tax (I-T) returns and affidavit of assets filed for nomination to the Himachal Pradesh Legislative Assembly elections in 2012.

The Hindu had reported on October 13 that the seizure of a document by the I-T Department during a December 1, 2010 raid on Ispat Industries’ Delhi offices recorded off-book cash payments to a ‘VBS’ of Rs. 50,00,000 on 28/10/2009, Rs. 50,00,000 on 23/12/2009, Rs. 27,74,535 on 21/4/2010, and Rs. 1,00,00,000 on 24/8/2010, along with a payment of Rs. 15 lakh to ‘Min of Steel APS’ recorded for September 11, 2008. The cash payments add up to a little less than Rs. 2.5 crore.

It now turns out that Mr. Singh, who admits to one Anand Chauhan managing his money in a legal document, filed revised I-T Returns in 2012 for the assessment years 2009-10, 2010-11 and 2011-12, soon after Mr. Chauhan’s accounts came under the scrutiny of the Shimla tax authorities in 2011.

Mr. Singh entered into a Memorandum of Understanding with Mr. Chauhan on June 15, 2008 that the latter would manage his apple orchards and invest the proceeds/income from the sale of apples in “government securities, Mutual Funds, in schemes of LIC or to invest the money in the products of Scheduled Banks by ensuring safe and better returns.”

Between April 24, 2008 and March 31, 2010, Mr. Chauhan deposited roughly Rs. 5 crore in cash in his Punjab National Bank account in Shimla. He also made corresponding deposits by cheque for LIC premiums totalling roughly Rs. 5 crore in favour of the former Steel Minister, his wife Pratibha Singh and two children, Aparajita Kumari and Vikramaditya Singh.

Coincidentally, Mr. Singh’s revised I-T returns show an increase in agricultural income to the tune of Rs. 6.57 crore. While the original I-T returns document the net agricultural income at Rs. 7,34,000, Rs. 15,00,000 and Rs. 25,00,000 for the assessment years 2009-10, 2010-11 and 2011-12 respectively, the revised I-T returns, all filed on March 2, 2012, show staggering, corresponding escalations to Rs. 2,21,35,000 (a 30-fold increase), Rs. 2,80,92,500 (an 18-fold increase) and Rs. 1,55,00,000 (a 6-fold increase).

Whether this increase in agricultural income came from the late realisation of sale proceeds from Mr. Singh’s apple harvest or from some other source is not known. Nor is it clear whether these proceeds were the source of the cash deposits made in Mr. Chauhan’s accounts that the I-T office is scrutinising.

The former Steel Minister, who is now leading the Congress camp in the upcoming Himachal Assembly elections, did not respond to a detailed e-mail sent by The Hindu asking questions about the revision of his I-T returns, the cash deposits of roughly Rs. 5 crore between 24.4.2008 and 31.3.2010 in Mr. Chauhan’s bank account and the LIC policies Mr. Chauhan bought for Mr. Singh and his family. He neither responded to an SMS or call to his mobile number.

Mr. Singh’s affidavit of assets filed for nomination to the Assembly elections in 2012 lists three LIC policies in his name with premiums of Rs. 1,20,000, Rs. 50,00,000 and Rs. 1,00,00,000. Five LIC policies worth Rs. 1,00,00,000, Rs. 50,00,000, Rs. 50,00,000, Rs. 10,00,000 and Rs. 10,00,000 are listed in the name of his wife. His daughter Aparajita Kumari has two LIC policies of Rs. 10,00,000 and Rs. 5,00,000, while his son Vikramaditya Singh has 5 LIC policies worth Rs. 50,00,000, Rs. 10,00,000, Rs. 20,00,000, Rs. 5,00,000 and Rs. 5,00,000.

Mr. Singh’s MoU with Mr. Chauhan on June 15, 2008 for the management of his apple orchards and money is also curious considering that he almost simultaneously entered into a similar MoU with one Bishambar Dass on June 17, 2008. The Hindu’s query about how Mr. Singh could have entered into two conflicting agreements for the management of an orchard on the same land for the same period and whether the MoU with Mr. Chauhan had been backdated also went unanswered.

Other entries from the Mittal diary for 2006-2010 show routine payoffs to officials in the ministries of finance, commerce, company affairs, petroleum, coal, mines, steel, environment and forests, rural development, highways and road transport, National Highways Authority of India, public sector firm MSTC, CBI and Enforcement Directorate, and the Korean High Commission (sic). Payments to journalists for stopping negative articles and photographs are also listed in these cash accounts.

After Ispat was raided, Mr. Singh, a Himachal-based Congress leader, was edged out as Steel Minister in January 2011 after a tenure spanning less than 2 years (May 28, 2009-January 18, 2011).