By IANS,
New Delhi : The Bofors ghost is out again to haunt the Congress-led government as an Income Tax tribunal has ruled that Italian businessman Ottavio Quattrocchi and his partner Win Chadha received a commission of over Rs.412 million in the supply of 155mm howitzer guns to India in 1987.
“The investigations revealed that an amount of 242.62 million Swedish kroners (Rs.412.5 million) was paid by M/s. AB Bofors, as commission, to Quattrocchi and Chadha through M/s. A.E. Services and M/s. Svenska, in contravention of the policy of the government of India not to allow middlemen/agents in the deal,” the tribunal said in its 98-page order dated Dec 31, 2010.
The order, delivered by Judicial Member R.P. Tolani and Accountant Member R.C. Sharma of the Income Tax tribunal, was made available here Monday.
It said no commission was to be paid by Bofors in connection with the contract and if any such stipulation in this regard did exist, the commission amount should have been reduced from the contract price.
“Thus the government of India had to pay excess amount of about 242.62 million Swedish kroners, which was passed on by Bofors to its agents W.N. Chadha and Quattrocchi against the express terms of contract” related to the Rs.1,500 crore deal for 400 Bofors guns.
“Bofors acted in violation of the Indian defence policies and rules and harmed the public exchequer, besides committing breach of propriety,” the tribunal order said.
It also stated that the agents had helped Bofors in getting the contract by “dubious means” with the help of local contacts and support within the Indian military authorities, the bureaucracy and concerned politicians. “The illicit payments to the agents and others were said to have been made by transactions in secret bank accounts in Switzerland.”
The tribunal said Quattrocchi was liable to pay income tax in India for the commission he received as he was staying in India then. Even the money received by Chadha, who died in 2001, as kickback is taxable.
The tribunal order also observed that Chadha and Quattrocchi had frequently transferred the funds received from one account to another to avoid detection and to obliterate the money-trail.
The tribunal order come a day ahead of a likely decision by a Delhi court in connection with the Central Bureau of Investigation (CBI) plea seeking to drop criminal proceedings against Quattrocchi on the grounds that there is no evidence against him and that persisting with the case will serve no purpose.
The CBI in 1999 charged former defence secretary S.K. Bhatnagar, Quattrocchi, former Bofors chief Martin Ardbo and the company itself in connection with the case.
Quattrocchi has never appeared before any court in the country. The CBI had failed on two occasions to get Quattrocchi extradited — first from Malaysia in 2003 and then from Argentina in 2007.
The tribunal’s observations in the case gave more ammunition to the opposition to target the Congress government on corruption when it is already battling scams in the 2G spectrum allocation and Commonwealth Games.
“This was not a mere case of bribery. Bribery was accompanied by a huge cover-up operation. Nobody has answered the questions which this order raises. Why was Quattrocchi paid the money?” Bharatiya Janata Party’s Arun Jaitley said, soon after the order was out.