CBDT circular vindicates party's position: Congress

New Delhi, Jan 4 (IANS) The Congress on Friday said that CBDT's December 31 circular has vindicated the party's position and exposed the government intention to mislead the judiciary and produce fake cases against their political rivals.

In the circular, CBDT had clarified that the provisions of Section 56(2)(vii)(a) of the Income Tax Act, 1961 shall not be applicable in cases of receipt of shares by a specified company as a result of fresh issuance of shares by the specified company.

"We welcome the latest circular of the Central Board of Direct Taxes (CBDT) dated December 31. This vindicates our position that there never was an issue about issuance of such shares as a taxable event as it was being projected by way of harassment," Congress Legal Department chairman Vivek Tankha said.

Bharatiya Janata Party (BJP) leader Subramanian Swamy had filed a complaint about "cheating" in the acquisition of Associated Journals Ltd (AJL), which publishes the National Herald newspaper, by Young Indian, "a firm in which Sonia and Rahul Gandhi each own a stake".

Swamy accused Congress President Rahul Gandhi and his mother Sonia Gandhi of allegedly conspiring to cheat and misappropriate funds by paying only Rs 50 lakh, by which Young Indian Pvt Ltd obtained the right to recover Rs 90.25 crore which AJL owed to the Congress.