New Delhi: Chief Minister Pinarayi Vijayan's daughter, T Veena, has allegedly received Rs 1.72 crore from the private company Cochin Minerals and Rutile Limited (CMRL) in monthly instalments in the last three years. The New Delhi bench of the Income Tax Interim Settlement Board ruled that the money was given considering the relationship with a "prominent person".

Veena and her firm, Exalogic Solutions, had entered into an agreement with the CMRL to provide IT, marketing consultancy, and software services to the latter. However, no services were provided, as the income tax investigation found. CMRL Managing Director S N Sasidharan Kartha told the Income Tax Department that the money was, however, paid in monthly instalments as per the contract.

The Income Tax Department argued that Rs 1.72 crore was received by Veena and Exalogic during 2017–20, which is an "illegal transaction". A settlement board bench of Justices Amrapali Das, Rameshwar Singh, and M Jagadish Babu said the Income Tax Department has been able to establish on the basis of strong evidence that the money was paid for services not rendered.

The money was given through the bank. Paying for business expenses is permissible under the Income Tax Act. However, the bench accepted the Income Tax Department's argument that the money given to Veena and the company should be included in the category of an illegal transaction.

On January 25, 2019, the Income Tax Department conducted searches at the office and factory of CMRL and the residences of the MD and key officials. The searches were based on tax payment documents from 2013–14 to 2019–20.

During the searches, it was found that there was massive tax evasion by exaggerating the expenses of the company. The board passed the order on June 12 on a settlement application filed by CMRL and Sasidharan Kartha in November 2020.

During a raid conducted at the residence of CMRL Chief Financial Officer K S Suresh Kumar, evidence of illegal payments of crores of rupees to some prominent political and trade union leaders, police, officials, and media houses was found. A record of the agreements made by Veena and Exalogic with CMRL was also obtained during this inspection.

Rs 5 lakh for Veena every month; for Exalogic, Rs 3 lakh

In December 2016, the CMRL entered into an agreement to get IT and marketing consultancy services from Veena. Another agreement was signed in March 2017 with Veena's company, Exalogic, for software services. According to these, Veena had to be paid Rs 5 lakh per month and Exalogic Rs 3 lakh per month.

According to available data, Veena received a total of Rs 1.72 crore—Rs 55 lakh in personal capacity and Rs 1.17 crore for Exalogic. CMRL's Chief Financial Officer K S Suresh Kumar and Chief General Manager P Suresh Kumar deposed that they were not aware of any services made available to the company by Veena and Exalogic as per the contract. Kartha and company officials later tried to withdraw the statement through an affidavit. However, the Income Tax Department stood firm on the argument that the money was paid to Veena and Exalogic illegally.

No scope for appeal

The Interim Settlement Board is governed by Section 245AA of the Income Tax Act. Its decision is final, and there is no provision for appeal. The board considers the settlement application filed by an individual or entity accused of tax evasion. The Income Tax Department will raise arguments as an opposing party. The application will be disposed of on the basis of evidence.