In an interim relief to around 25 sitting and former MLAs and MPs from Punjab, the Punjab and Haryana high court has directed the income tax department not to proceed further for the recovery of capital gains tax from them on account of selling of their plots to the Tata Housing Development Society at Kansal village in SAS Nagar district for coming up with a housing project.
After hearing the detailed arguments in the case on 19 petitions, the division bench headed by justice Rajive Bhalla on Wednesday reserved its judgment.
The petitioners had moved the high court, challenging the income tax department's notices issued to them for payment of capital gains tax on an amount which they are allegedly "yet to receive" from the Tata Housing Company.
However, during the arguments of the case, the I-T department's counsel defended the department's decision of issuing notices to the petitioners for the recovery of capital gains tax.
At the same time, senior Supreme Court advocate Abhishek Manu Singhvi argued that the petitioners had handed over their land to Tata but not received the entire payment, which would be handed over to them in instalments. He added that as and when the petitioners would be getting the payments, they would surely submit their capital gains tax on the amount received.
The Punjab MLAs' Co-operative House Building Society came into existence in 2000 in which the petitioners were members. As per the agreement of the society's land with Tata, each MLA was to get Rs. 82.5 lakh and a flat in lieu of their plots they had agreed to hand over to Tata for the housing project. The Supreme Court recently had stayed the construction of Tata's housing project.
Appearing for the MLAs, their counsels told the court that the total amount which the MLAs received was below Rs. 30 lakh each and no flat had been given to them as of now. The MLAs and MPs had lost their case before the income tax appellate authority before moving the high court.
Politicians as petitioners
Bibi Jagir Kaur, Charanjit Singh Atwal (both sitting MLAs), Sucha Singh Langah, Sewa Singh Sekhwan (both former MLAs), Jagtar Singh Rajla, Gurdev Kaur, Tara Singh Ladal, Sukhdev Singh, Ranjit Singh, Surjit Kaur and Davinder Singh Cheema had filed 10 petitions on October 10.
However, on Wednesday, nine more petitions were filed, including one by union minister of state for external affairs and Patiala MP Preneet Kaur. The other petitioners were Tikshan Sud, Satjit Singh, Nirmal Singh Kahlon, Satpal Gosain, Balramji Dass Tandon, Jagdish Kaur Dhillon, Balbir Singh Bath, Satnam Singh Kainth, Satwinder Kaur Dhaliwal, Rajesh Singhal, Neeraj Singhal, Amrik Singh, Bhag Singh Malah and Prabhjit Singh.