Tax Evasion Proceedings Initiated Against 18 Others: Centre To SC

Plunder is not tax evasion, SC tells govt


Centre Not Serious About Black Money
New Delhi: The Supreme Court on Wednesday sliced through the Centre’s approach equating money plundered from India and stashed offshore with tax evasion and desired early netting of those who committed the mind-boggling crime.

“One trillion dollars is one estimate of the black money quantum. It is huge money, almost plunder of the nation and of far reaching consequences. Yet, the government has summarised the efforts as recovery of tax evaded on money kept in foreign banks. This is the worrying point,” said a bench of Justices B Sudershan Reddy and S S Nijjar.

Solicitor general Gopal Subramaniam said the Centre, alive to the problem and its magnitude, has tasked officers to rapidly gather details about offshore accounts holding money siphoned from India and their possible links to arms smuggling, drug syndicates and terror networks. But, the bench was displeased at slow proceedings against 18 Indians who held Rs 43.83 crore in Leichtenstein’s LGT Bank accounts, details of which were given to New Delhi by Germany last year.

The tax department had told the court in August 2009 that tax demand of Rs 24.26 crore was slapped against the 18 Indians and proceedings were initiated in Delhi, Mumbai, Kolkata and Chennai. “Is this all the information you got since the petition was filed in 2009,” the court asked repeatedly to counter Subramaniam.

He said: “This agreement is a globally recognised route to get information about account holders in foreign banks. As the agreement has a secrecy clause, it would not be prudent to reveal names of account holders at this stage.”

This answer got little applause from the court, which said, “We cannot understand why government is stylising money parked abroad as tax evasion. We are talking about pure and simple theft of national economy, a mind-boggling crime. We are not (talking) about niceties of this treaty or that treaty”.

‘8 Indian a/c holders in LGT Bank outside jurisdiction’

Tax Evasion Proceedings Initiated Against 18 Others: Centre To SC
New Delhi: Germany gave information about 26 accounts held by Indians in LGT Bank in Leichtenstein, but tax evasion proceedings could be initiated against only 18 resident citizens, the Centre informed the Supreme Court on Wednesday.

The Centre handed a sealed cover report containing the names of eight persons who too allegedly parked money siphoned from India in LGT Bank accounts. They were outside India’s jurisdiction, hence, were not proceeded against, it said.

“We are ready to share information with the court,” said solicitor general Gopal Subramaniam while handing over the sealed cover report to a Bench of Justices B Sudershan Reddy and S S Nijjar detailing the steps taken so far in relation to the revealed LGT account details.

Petitioner Ram Jethmalani had alleged that the government had done nothing to procure details offered free by the German government. His counsel Anil Divan alleged that initiation of tax evasion proceedings smacked of a “big cover-up exercise”.

The report, officials said, clarified that the Enforcement Directorate had written directly to the German authorities for LGT Bank account details, but were told to move through official channels. This forced India to take the double taxation avoidance agreement (DTAA) route and procure the information.

On the eight Indians who could not be proceeded against, the officials said, the account holders were not residents of India and were, thus, outside the domestic law’s ambit. The court had demanded to know the account holders’ identity.

The tax department had said the data from Germany revealed deposits of Rs 43.83 crore by 18 Indians. They have been asked to pay Rs 24.26 crore as tax in proceedings initiated in Delhi, Mumbai, Kolkata and Chennai.

The government on Wednesday said more information on black money could reach it with amendments to DTAA signed between India and the Swiss Federal Council on August 30 last year.