Rs 4,479-cr in Indians' HSBC-list accounts: SIT on black money

In first major disclosure about money held in Swiss banks, government today said Rs 4,479 crore is held in the accounts owned by Indians, who figured on the HSBC List, and the Income Tax Department has initiated action against 79 of such account holders.

Besides, the tax department and other agencies including Enforcement Directorate are probing cases involving unaccounted wealth totalling Rs 14,957.95 crore within India.

In case of suspected black money abroad, the disclosure relates to a list of 628 Indians, who figured on a list of account holders in HSBC's Geneva branch that India had got from the French government.

Out of these, no balance has been found in case of 289 accounts, according to a report of the Special Investigation Team (SIT) on black money which was submitted to the Supreme Court.

"Out of the 628 persons, 201 are either non-residents or non-traceable, leaving 427 persons cases as actionable cases," an official statement said while releasing "relevant portion of the second report of SIT on black money".

The amount involved in these cases is about Rs 4,479 crore. Of this, the Income Tax Department has finalised assessment for 79 entities involving more than 300 cases.

"An amount of Rs 2,926 crore has been brought to tax towards the undisclosed balances in the accounts relating to these persons," the statement said, adding that taxes along with interest at applicable rates have been levied.

"Penalty proceedings under Income Tax Act, 1961 have been initiated in 46 cases. Such penalties have been levied in 3 cases so far. With regard to other assesses, proceedings are pending," it said.

The statement, however, did not disclose the names of the the account holders.
Prosecutions have been initiated in 6 cases for wilful attempts to evade taxes besides show cause notices have been issued in 10 others, it said.

"In other cases, necessary action is being expedited and substantial progress is expected in coming months," it added.

Earlier in the day, Finance Minister Arun Jaitley had said at a function here that proceedings in the cases related to the HSBC list will be completed by March 31, 2015.

While suggesting steps like curbs on cash transportation beyond a level and mandatory quoting of PAN for cash and cheque payments over Rs one lakh, the SIT has flagged off mining, ponzi schemes, iron ore exports, misuse of export- import route as major areas prone to black money transactions.

It also pointed out that 'Angadias', persons carry large amounts of cash while acting as 'money couriers' in Gujarat and Maharashtra especially, were playing a key role in transfer of unaccounted money.

Giving update on various cases, the statement said that Directorate of Revenue Intelligence (DRI) has furnished information in 31 cases of iron ore export, of which 11 parties have admitted to undervaluation and paid Rs 116.73 crore.

In other cases, show cause notices have been issued and action will be taken in accordance with law.

Besides, the Directorate of Enforcement is attaching property worth Rs 400 crore and has arrested a person in a case relating to mining in Odisha.

In Karnataka, three attachment orders have been passed for assets worth a total of Rs 995.97 crore.

In several cases in Goa and Jharkhand, preliminary scrutiny and investigation is in progress in connection with illegal mining.

The report also pointed out that the ED is facing difficulties in taking coercive action in ponzi chit-fund cases due to a stay order by Kolkata High Court.

In one case in Jharkhand, provisional attachment orders for properties worth Rs 452.43 crore were passed while Rs 884.13 crore worth of assets have been attached in another mining case in Karnataka.

In a similar case in Andhra Pradesh, Rs 1093.10 crore worth assets have been attached.
Giving suggestions to check black money menace, SIT said PAN should be made mandatory in every transaction of over Rs 1 lakh, either by cash or cheque.

Citing examples of European countries, it said that there should be a limit on transportation and holding of cash. Government may consider reasonable threshold which could be Rs 10 lakh or Rs 15 lakh.

"This would control holding of unaccounted money to a large extent. This would also control transfer of unaccounted cash from one destination to other, which at present is rampant, may be Angadias or by other means," it said.

The SIT has also suggested setting up of an institutional mechanism to examine mismatch between export/import data with corresponding data of other countries on a quarterly basis to unearth black money.

Also, the shipping bills should include the international market price of goods and machinery sought to be exported. "This suggestion is under consideration and is likely to be implemented within short time," the statement said.

The SIT also suggested that the tax evasion of Rs 50 lakh or more be made a 'predicate offence' so that action can be taken under Prevention of Money Laundering Act.

In case it is found that an individual or entity owns a property abroad in violation of the law, a provision should be made in the FEMA to provide for seizure and confiscation of property of equivalent value within the country.

Also, there should be a dynamic interaction between different stakeholders like reporting entities, Financial Intelligence Unit and law enforcement authorities.

In cases where ED has attached a property and there are income tax dues to be collected, the SIT said that the former should be open to recovering dues from the attached property.

It also suggested setting up of a central KYC registry to weed out use of multiple identities for financial transactions.

SIT said that at least five additional chief judicial magistrates courts should be set up in Mumbai to deal with 5000 pending IT prosecution cases.