ISLAMABAD: The continuous flow of gifts to the tune of Rs544 million from Hussain Nawaz to Prime Minister Nawaz Sharif became the sticking point during the proceedings of the Panamagate case in the Supreme Court on Wednesday.

Senior counsel Makhdoom Ali Khan, who represents the prime minister, argued that the gifted sums were received through normal banking channels and were duly disclosed by his client in subsequent wealth reconciliation statements and thus could not be labelled as income from other sources, liable to be taxed.

But the Supreme Court did not seem satisfied with this explanation for Hussain’s four-year gift-giving spree, which began in 2011. “The purpose of looking at this aspect is to determine whether this is a rotational exercise to whiten the money,” said Justice Ijazul Ahsan, a member of the five-judge bench hearing a set of petitions seeking disqualification of the prime minister.

The strong observations, coming one after another from the bench, were music to the ears of Pakistan Tehreek-i-Insaf (PTI) leaders: Imran Khan, Jahangir Khan Tareen, Shah Mehmood Qureshi and other senior party leaders were on their feet in excitement during most part of the hearing.

“The son sends money to his father and the father purchases lands for the daughter, who then pays back the money to the father,” Justice Asif Saeed Khosa, who heads the larger bench, mused.

Judges seek clarification of discrepancies in records submitted by Maryam’s counsel

Consider the possibility that the money could have been transferred outside Pakistan through unofficial channels, which then came back through legal means to buy lands and make the money kosher, the judge observed.

The court wanted to look at the source of these gifts because there was an impression that the money was being rotated, Justice Ahsan observed.

The norm in our society was that sons received gifts or financial assistance from their fathers, Justice Ejaz Afzal Khan said. But here, huge sums of money were being remitted by the sons to their father. “Can it be that the businesses run by Hussain Nawaz are, in fact, being managed by his father?” observed Justice Khan, before adding that this was a mere presumption arising from the circumstances.

We should be asking “why not?” instead of “why?”, came the reply from the prime minister’s counsel, who insisted that since the money came through clean channels, the court should not conjecture about its use as a method of tax evasion.

There was no evidence or document to assume that any rotation of money took place, the counsel argued, adding that Advocate Salman Akram Raja, who represented Hussain Nawaz, would inform the court in detail about the son’s businesses when his turn came.

The counsel also stated that all these gifts were received through normal banking channels, with a national tax number, and were subsequently declared in the income tax returns by his father, the prime minister.

Therefore, tax evasion could not be presumed, since any such allegation would have to be specifically levelled and proven.

He then cited a 2012 Supreme Court case, the Federation of Pakistan versus Sindh High Court Bar Association, where it was established that no ‘roving’ or ‘fishing’ inquiry could be ordered against any individual.

Usually, sons gifted wrist watches or the like to their fathers. But here, there was strangely an incessant flow of huge amounts of money as presents, Justice Khosa observed, adding that perhaps this was how the rich exchanged presents.

We were facing 100 questions and it was like the Chinese torture of a thousand cuts, Justice Sheikh Azmat Saeed regretted, adding that the court was chasing a mirage because they had not reached the real controversy.

Let’s call spade a spade, the judge observed, adding after 11 days of hearing, they had reached the real issue, which was not being brought up by either side. The ownership of the four London flats was just an offshoot; the heart of the matter in the entire case was how the funds were generated — a truth which the nation wanted to know, the judge deplored.

Nescoll Limited and Nielson Enterprises, which controled the four flats, were not fund-generating units, therefore someone had to look into how the funds were generated, the court noted.

The judge also had some flak reserved for the petitioner’s side. “The other side [Imran Khan] has gambled in the hope that the Supreme Court will decide the matter at hand on the available documents, which the court cannot do,” the judge observed.

Neither party wanted a probe because they did not want the truth to come out, lamented Justice Saeed.

On the allegations that Maryam Nawaz was dependant of the prime minister, the counsel denied that his client had ever declared his daughter as his dependant in the nomination papers for the 2013 elections.

Referring to allegations that the prime minister’s wealth statement from 2011 showed land worth Rs24.8 million in the name of Maryam as a dependant, the counsel explained that column 12 of the income tax returns for 2011 had row 12, which showed assets in the name of minor children and other dependants. The prime minister in this row had mentioned 84 kanals 19 marlas of agricultural land in the name of his daughter, located in Mauza Sultankey, Lahore.

This was done because no other column was available in the form for the tax year 2011 where the purchase of land in the name of another person could be declared.

In 2015, through SRO 841(I)/2015 of Aug 26, 2015, a new column was included at Serial No.14; called “Assets in Others’ Name” to disclose the assets purchased in others’ names.

The next year, the land was transferred in Maryam’s name , which was duly mentioned by her in her returns after she paid back the money.

During the proceedings the court also noticed a discrepancy in the purchase of the land, since the stamp paper was dated March 1, 2011, whereas the date of deal executed was Feb 7, 2011.

At the fag end of Wednesday’s proceedings, Advocate Fawad Chaudhry requested the court to order the high court registrar to seal all the land records. Shahid Hamid, who represents Maryam Nawaz, rushed to the rostrum to explain that he would come out with the exact position after checking the original record.

At this, Justice Saeed observed that the court would hear him when his turn came.

Published in Dawn January 19th, 2017