A sample study of Indian companies’ financial transactions in their global trade had supported a report that black money flows amounted to Rs 6 lakh crore in 2012 and Rs 27 lakh crore in the past 10 years.
NEW DELHI – The Special Investigation Team (SIT) on black money informed the Supreme Court that a sample study of Indian companies’ financial transactions in their global trade had supported a report that black money flows amounted to Rs 6 lakh crore in 2012 and Rs 27 lakh crore in the past 10 years.
The SC-appointed SIT, headed by retired apex court Justice MB Shah, has given this information in its third status report on its investigations. The sample study pertained to a few transactions involving trade mismatch between India and China.
The SIT had asked the Directorate of Revenue Intelligence (DRI) to conduct the study after noticing the December 2013 report of the Global Financial Integrity (GFI), a Ford Foundation, estimating the illicit financial flows in India’s trade with other countries in the past ten years.
The DRI report “establishes a pattern of under valuation to avoid import duties in India and that differential between the actual value and declared value are being sent through informal channels,” the SIT said. The SIT report says details of accounts held by 422 Indian residents in just one overseas bank — HSBC Bank, Geneva — showed that these accounts had a peak balance of Rs 4,526 crore.
India had received details of 624 accounts pertaining to HSBC Bank of which 422 were of Indian residents. Action was necessary in 403 cases, while assessments had been completed in 373 cases resulting in unearthing undisclosed income of Rs 6,432 crore. “A tax demand of Rs 4,520 crore is raised, which includes demand in protective assessments,” the SIT report said. The SIT includes top officials from the Finance Ministry and intelligence departments.
The SIT report was submitted to a Bench headed by Chief Justice HL Dattu which is hearing a batch of PILs pleading for a directive to the government to bring back all the black money stashed in overseas tax havens.
On the black money generated through cricket betting, the SIT said steps were necessary to “control” it as business chamber FICCI had estimated the amount at over Rs 3 lakh crore. The SIT also endorsed the plea for forcing candidates contesting elections to declare they did not have illegal money abroad.
The report said the Central Board of Direct Taxes (CBDT) had detected unaccounted income to the tune of Rs 7,078 crore in 2013-14 and Rs 4,456.96 crore in 2014-14 (till February). The Enforcement Directorate had unearthed money laundering crimes involving Rs 3,657 crore. The main PIL petitioner Ram Jethmalani, however, pleaded with the SC today that the NDA government was not serious about cracking down on black money holders.
This was clear from BJP president Amit Shah’s interview to the media that Prime Minister Narendra Modi’s Lok Sabha poll promise of bringing back money was just a “jumla” (campaign rhetoric), the senior advocate said.
