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Apex court asks Govt for black money sources, action taken
New Delhi, Jan. 27
The Supreme Court on Thursday sought to know from the Government the exact sources of black money, and asked if illegal wealth siphoned off from India to foreign banks was from arms dealing, smuggling and drug trafficking.
The Court also asked what action the Government had taken against citizens found to have stashed illicit funds abroad. It directed the Government to file a detailed report by next Thursday.
Not satisfied with the Solicitor-General, Mr Gopal Subramanium's contention that the Government was taking all action under the Double Taxation Avoidance Agreement (DTAA) against those holding funds in foreign banks, the Court asked the Government not to limit its investigation to the tax-evasion aspect but widen it to all other sources as well. “You are aware of some names. They are Indian citizens and are amenable to Indian laws. But have you set the law in motion?” the court asked.
It also sought replies from the Home and External Affairs Ministries, the Central Board of Direct Taxes, Enforcement Directorate, the RBI, the SEBI and the Central Vigilance Commission on a petition seeking direction to the Government to ratify the UN Convention against Corruption and ink Tax Information Exchange Agreements. The petition said that this would help retrieve black money from abroad.
Mr Subramanium said ‘transfer pricing' was the main method to move money overseas, adding that around 77 per cent of the money moved through this route. He said through better ‘transfer pricing' administration over the last two years, the Centre was able to ensure that Rs 34,000 crore could not leave the country.
He said the Government was scrutinising ‘transfer pricing' norms as well as taking action against international agreements on black money. According to the new provisions in the Direct Taxes Code Bill, individuals have to report their wealth not only in India but also overseas including their shareholding in entities abroad, he said.
Mr Subramanium also said the Government has no problems in sharing information with the court about the names of people found with black money abroad, adding that the ED and I-T authorities were looking into the matter.
The court also asked the Government to verify .the allegations by senior advocate Mr Anil Divan, appearing for one of the petitioners, and petitioner Mr Ram Jethmalani that the Government was not serious about the matter. The petitioners said Pune-based businessman Mr Hasan Ali Khan, under investigation for his alleged foreign bank accounts, has fled the country. To this,
Mr Jethmalani, in his petition, wanted directions from the Court to the Government to retrieve black money stashed in foreign banks which, he claimed, were over $1 trillion. Stating that a protocol to amend the India-Switzerland DTAA was worded in such a way that it is impossible to get any information from Switzerland on black money, he said it was being deliberately done as the authorities have no intention of obtaining such information. The apex court had earlier termed black money stashed abroad as national plunder.
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