Mumbai: After investigation, information received from several agencies all over the world, The mumbai unit of Income Tax Department has served the notice to members of the Mukesh Ambani undert provision of the 2105 black money act.
Notices were served on March 28, 2019 in the names of Mukesh Ambani’s wife-Nita Ambani and their three children for their alleged “undisclosed foreign income and assets”.
In 2011, Income tax Department recived details of estimated 700 Indians holding account in HSBC Geneva. But the International Consortium of Investigative Journalists (February 2015) called Swiss Leaks which expanded the number of HSBC Geneva account holders to 1,195.
A cluster of 14 HSBC Geneva bank accounts of cumulative balance $601 million held by offshore entities in tax havens were all linked, through a complex chain of associates and offshore holdings, to the Reliance Group.
When asked about the bank accounts that are linked with reliance, spokesperson responded:” We deny all the contents of your emails including receipt of any such notice”.
Details of the Income Tax investigation report dated February 4, 2019 and the notices sent on March 28, 2019 reveal that members of the Ambani family are named as “ultimate beneficiaries” of one of these 14 entities, the Capital Investment Trust, through various foreign and domestic entities.
Details reveal that the notices, from the office of the Additional Commissioner of Income Tax 3(3), Mumbai, were served under Sub-Section (I) of Section 10 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.
The IT Department notice has also alleged that the Ambanis failed to disclose details and holdings in the Capital Investment Trust and in its “underlying company”. The notice states that the assesses were ultimate beneficiaries of another entity named Harinarayan Enterprises, having a Mumbai address.
Citing “non-compliance,” the notice states that following provisions introduced in the 2012 Finance Bill, the assesses were required to disclose details of all foreign bank accounts, Trusts as well as financial interest/ immovable property or assets held outside India. And that the assesses also did not avail of the Black Money Disclosure Scheme of 2015 under which a four-month compliance window was given to declare any foreign income or assets.
The notice clarifies that in this case, the officer proposes to assess the “Undisclosed Foreign Asset” in Previous Year (PY) 2018-2019 relevant to Assessment Year (AY) 2019-2020. The assesses have been asked to produce accounts/ documents/ evidence in their support either in person or through authorised representatives. The first date of hearing fixed for the case was April 12, 2019.
The notices are based on the IT Department’s investigation which was finalized about three months before the notices were served. Its key findings:
- Records received from overseas under foreign exchange treaties show that Infrastructure Company Limited invested $400 million on February 9, 2004 in GDRs of Reliance Ports & Terminals (RPTL) and Reliance Utilities & Power Ltd (RUPL). However, the name of this investor (Infrastructure Company Limited) does not appear in the list of shareholders of the two Indian companies. This $400 million ultimately reached RIHPL (Reliance Industries Holding Pvt Ltd) whose ultimate beneficiaries are the four members of the Ambani family.
2. Foreign assets were obtained via The Bank of New York Mellon in the form of GDRs in the year 2002-03 and after transfer/ demerger/ amalgamation, the funds reached Reliance Industries Holding Private Limited having a share capital of Rs 5 lakh only. The shareholder of this company was a private Trust named Harinarayan Enterprises with four beneficiaries belonging to the Ambani family. Inquiries with The Bank of New York Mellon showed that it acted as the global custodian of the GDRs and was neither the owner nor beneficial owner of the GDRs. It is concluded that the two Indian companies “tried to hide” the names of owners and beneficial owners of GDRs by incorporating the name of Bank of New York as investors/ shareholders.
The inquiry report also ask permission for “remedial action” to be taken against the ultimate beneficiaries.