The Mumbai unit of the Income Tax Department, after an investigation aided by information received from agencies in several countries, has served notices to members of the Mukesh Ambani family under provisions of the 2015 Black Money Act.
In a closely guarded move, 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”.
The I-T probe began after the government received details of an estimated 700 Indian individuals and entities holding accounts in HSBC Geneva in 2011. This was followed by an investigation by The Indian Express and the International Consortium of Investigative Journalists (February 2015) — called Swiss Leaks — which expanded the number of HSBC Geneva account holders to 1,195.
It was The Indian Express investigation that had first revealed how a cluster of 14 HSBC Geneva bank accounts with a cumulative balance of $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.
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.
Responding to questions sent by The Indian Express on the notices and the key allegations, a Reliance spokesperson replied: “We deny all the contents of your email including receipt of any such notice.”
However, The Indian Express has learnt that the notices were served after a protracted “back and forth” between the Mumbai unit and the top brass of the Central Board of Direct Taxes. Final clearances were given days before the notices were served.
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.
There are details of how Capital Investment Trust was created on November 5, 2003 with one C J Damani as its Settlor/ Economic Contributor. The Trust’s initial funding was just $1,000. It owned an entity named Thames Global Limited which, in turn, owned Infrastructure Company Limited and Antalis Management Limited based in the British Virgin Islands.
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 Cayman Islands-based Infrastructure Company Limited of which they were also ultimate beneficiaries.
The notice states that the assessees 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 assessees 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 assessees 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.