The Virbhadra Controversy and BJP's charges: 10 latest developments

Earlier this month, NDTV reported that records maintained by a steel company showed that it had made payments in cash to members of different government departments.  The documents, seized in an income tax raid in 2009  from the Delhi office of Ispat Industries Limited (IIL), showed that 2.8 crores had been paid to "VBS." (Read - The 'VBS' files bombshell: ISPAT payoffs to steel ministry?)

The steel minister at the time was Virbhrada Singh, a prominent leader of the Congress from the state of Himachal Pradesh.  He has denied receiving any payments directly or otherwise from IIL, which was owned by the brothers of steel tycoon Laxmi Mittal.

Mr Singh says the documents and the BJP's charges are a political conspiracy by the party to target him ahead of the elections in Himachal Pradesh, scheduled for next month.  His party, the Congress, says that entries in a diary are not evidence of a swindle and do not merit an investigation.

But the BJP's Arun Jaitley disagrees. He says documents show that the alleged payments by Ispat were laundered for Mr Singh by an aide named Anand Chauhan.

He says that tax officials in Shimla  were alerted to a new bank account opened by an LIC agent named Anand Chauhan.  He deposited large amounts in this account regularly, then issued cheques against this account to buy insurance policies in the names of four different people.  Those beneficiaries, Mr Jaitley says, were Mr Singh, his wife and their two children. Six crores was transacted like this, Mr Jaitley alleged.  "Unaccounted money goes into a ghost account opened by Anant Chauhan, and Sri Virbhadra Singh  and his family become beneficiaries," he claimed.

The BJP alleges after  reports of IIL's diaries became public, Mr Singh changed his income tax returns to justify an income of  Rs 6.5 crore. The BJP also says before he revised his returns,  Mr Singh's income from agriculture had gone up from 7.5 lakhs to 25 lakhs over a period of 3 years (2009-11).

Mr Jaitley  said that the revision of returns was done only after Mr Singh's aide, who is also an LIC agent and got him and his family  policies worth Rs 6 crore, came under income tax scrutiny for "unaccounted money". "This is a case of bribery, conversion of bribe money through money-laundering into real income, forgery by back-dating an agreement," Mr Jaitley said.

He  demanded that the matter should be probed by a Special Investigation Team comprising three honest police officers."This matter cannot be investigated by CBI due to its bad track record. Secondly, in the diaries, CBI is shown as a beneficiary," the BJP leader claimed.  The documents for Ispat Industries Limited grabbed during income tax raids show Rs 35,000 listed against the CBI and Enforcement Directorate staff.

He also took a shot at Congress president Sonia Gandhi, who shared the stage with Mr Singh this week at an election rally in Himachal Pradesh. "Had she known this, she would not have shared the stage with Virbhadra Singh. And if she knew and yet shared the stage, she should not have given a sermon on corruption," the BJP leader said.

Under attack from the BJP, Virbhadra Singh today brushed aside allegations of income tax evasion, money-laundering and forgery as "false and fabricated" and threatened action against those behind the "malicious" campaign ahead of Himachal assembly polls. "The information carried out by a section of the media is factually incorrect and details are being put out to create confusion in the public, and even divert my attention from the election campaign," he said. (Read: Allegations levelled by BJP fabricated, says Virbhadra Singh)