The book of accounts seized by the Income Tax Department in the multi-crore gutkha scam in Tamil Nadu points to the involvement of more police officers, including two in the IPS rank, in illegally facilitating storage, transportation and sale of the tobacco product in Chennai.
While the involvement of two DGP rank officers is being probed by the Directorate of Vigilance and Anti-Corruption (DVAC), on the directions of the Madras High Court, it has come to light that the two Joint Commissioners of Police, who served in Chennai during 2015-16 had allegedly received payments from a gutkha manufacturer through a middleman.
The Hindu has access to the copy of the Income Tax report to the Chief Secretary, the book of accounts and the statement of Madhava Rao, a partner in MDM Gutkha.
An extract from the book of accounts and sworn statement of the gutkha manufacture
The documents reveal that bribes were paid on various dates to the State Health Minister, two former Commissioners of Police, two Joint Commissioners of Police and scores of others from various State and Central government departments.
A perusal of the book of accounts shows that ₹92 lakh was paid to an Assistant Commissioner of Police and ₹65 lakh to two Joint Commissioners of Police between June 6, 2015, and March 21, 2016.
This is part of the ₹39.91 crore in total that was paid to officials of various departments.
While the demand for a probe by a special investigation team of the CBI is pending before the High Court, the DVAC, which has registered a case against some low level officials, has launched an indepth investigation into the circumstances under which the income tax report received by then Chief Secretary P. Rama Mohana Rao went missing. The reports that were handed over to then Director General of Police Ashok Kumar were found in the room occupied by V.K. Sasikala, close aide of former Chief Minister Jayalalithaa, at Veda Nilayam in Poes Garden, Chennai.
Tax on profits
The documents also show that despite the ban, the sale of gutkha between November 2014 and June 2016 was to the tune of ₹384.38 crore.
Madhava Rao, in a sworn statement, admitted that his firm made a gross profit of ₹188.13 crore in that period.
Promising to pay income tax on the profits made through the gutkha business, the manufacturer made an appeal to the authorities not to pursue penalty or prosecution proceedings against him.
Since payment of bribe is not allowed under the head of expenses, the Income Tax Department will also levy tax on ₹39.91 crore that was entered as payments made to the Minister, a few IPS officers, top Central/ State government officials and others in the book of accounts, sources in the department said, adding that the process of levying tax on gutkha sales was being pursued by the assessment wing.
