Mukesh Ambani family faces investigation under Black Money Act

RIL does not respond to Tehelka queries as Income Tax Department seeks details from seven countries in connection with Mukesh Ambani family case, reports Tehelka Bureau

The income-tax department has reportedly sought detailed information from its counterparts in seven countries in connection with an ongoing probe against the members of the Mukesh Ambani family.

Being a responsible and fair media house, Tehelka sent four emails to Reliance Industries Limited who’s Chairman is Mukesh Ambani to elicit version of Ambanis.

The automated response read, “Thank you for writing to us. Your feedback/query has been recorded successfully. We will try to address your query as soon as possible. Any one of our executives will get in touch with you if necessary”. However, till the time of filing of this story, none from Reliance Industries Limited cared to provide the version as requested.

The email for version sent to Reliance Industries Limited is being reproduced here.

Dear Sir/Ma’am,

Tehelka is doing a story on the ongoing probe being conducted under the provisions of the Black Money Act, 2015 alleging involvement of family members of Mr. Mukesh Ambani in undisclosed foreign income and assets in the HSBC Bank in Geneva and subsequent issuance of Income Tax Notices.

As a just media house, we would like to incorporate your view point/version in the story. Kindly send your comments to the questions below within next three days.

  1. Has the Income Tax Department issued a notice to Mukesh Ambani and his family members in connection with ongoing probe being conducted under the provisions of the Black Money Act, 2015, for, what the I-T department alleges, undisclosed foreign income and assets in the HSBC Bank in Geneva.
  2. Is it true that the I-T department sent the letters after the assesses — Nita Ambani and her three children Isha, Anant and Akash — contested the I-T notices, calling them “illegal” and holding them violative of the BM (UFI&A) & IT. The I-T department had held a hearing into the matter on April 12. Is it true that the IT department notice issued on 28 said that you “have failed to disclose details of the trust Capital Investment Trust, whose underlying company is Infrastructure Company based at Cayman Island”?
  3. There are allegations that the Capital Investment Trust was used for the purpose of transferring foreign funds comprising global depository receipts (GDRs). And notices were served on 28 March 2019 in the names of family members of Mukesh Ambani for their alleged, “undisclosed foreign income and assets”.
  4. Are you aware that the IT department has exchanged information regarding members of Mukesh Ambani family in a quarterly meet at Ukraine with seven seven countries India had pacts with-Switzerland, St. Lucia, Mauritius, Luxembourg, US, UK and Belgium.
  5. Are you aware that the Swiss Leaks, in 2015, had named 1,195 Indian Accounts, including 14 holdings connected to Capital Investment Trust, found connected to 628 Indians who had accounts in HSBC Private Bank, including the Ambanis. The collective worth of these accounts was estimated to be 25,000 crore in 2006-07.
  6. There are allegations that the IT department notice has 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.

According to a report, the probe is being conducted under the provisions of the Black Money Act, 2015, for, what the I-T department alleges, undisclosed foreign income and assets. The seven countries from where the information has been sought are the US, the UK, the Switzerland, St. Lucia, Mauritus, Luxembourg and Belgium. As per the report published in the Business Standard, the I-T department sent the queries last month.

They were mainly about Capital Investment Trust, which, according to the I-T department, was used for the purpose of transferring foreign funds comprising global depository receipts (GDRs). Earlier, the Indian Express had reported that 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.

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. The notices were reportedly served in the names of family members of Mukesh Ambani for their alleged “undisclosed foreign income and assets”.

The Income Tax department has apparently issued a notice to Reliance Industries Chairman Mukesh Ambani and his family under provisions of the 2015 Black money act. As per reports, the IT department has asked Ambani to reveal about the family’s undisclosed assets in the HSBC bank in Geneva.

According to reports, the IT department had first issued a notice to the family in March citing its undisclosed assets in foreign countries. It had also arranged a sitting with the family on April 12.

According to the findings made by the IT officials, Mukesh Ambani’s family members are the beneficiaries of the bank account in HSBC, Geneva. The reports regarding these findings were reportedly collected from various foreign agencies on the basis of the 2015 Black Money act.

Reportedly, the Income Tax department had ‘exchanged’ information regarding “members of the Mukesh Ambani family” over alleged “undisclosed foreign income and assets” at Ukraine, with seven countries India had pacts with-Switzerland, St. Lucia, Mauritius, Luxembourg, US, UK and Belgium.

The media reports had claimed the IT department notice had also included names of the three children of Mukesh Ambani. The report had claimed the Ambanis had failed to disclose details and holdings in the Cayman Islands-based Infrastructure Company Limited of which they were also “ultimate beneficiaries.”

It may be recalled that the Swiss Leaks, in 2015, had named 1,195 Indian Accounts, including 14 holdings connected to Capital Investment Trust, found connected to 628 Indians who had accounts in HSBC Private Bank, including allegedly the Ambanis. The collective worth of these accounts was estimated to be 25,000 crores.

The reports claimed that the notices were served to Nita Ambani and her three children under the Black Money Act of 2015. The investigation linked Mukesh Ambani’s Reliance group to offshore entities which had deposited around $601 million in a cluster of 14 HSBC Geneva bank accounts. According to the March 2019 Income Tax notice, members of the Ambani family have been named as “ultimate beneficiaries” of one of these 14 entities, the Capital Investment Trust.

Reportedly, the IT department notice has 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 income tax (IT) department has sought clarifications from overseas following show-cause notices to the family members of Reliance Industries chairman Mukesh Ambani regarding alleged evasion on account of foreign income.  The notices were issued in under the provisions of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax or BM (UFI&A) & IT Act. The Foreign Tax and Tax Research (FTTR) unit is seeking information from the US, the UK, Belgium, Switzerland, Mauritius, Armenia and Luxembourg. It has also written to St Lucia seeking information under the mutual legal assistance treaty (MLAT).

According to the I-T documents, Bartow Holdings was reportedly the beneficiary of an entity called Capital Investment Trust (CIT). Capital Investment Trust (CIT) was incorporated in the Cayman Islands by one CJ Damani. Over the years, a number of offshore entities controlled by Damani were established, the holding company of which was
National Industries.

The I-T department alleges that CIT was used to transfer foreign funds, comprising GDRs worth $400 million, to two Indian entities owned by the Ambani family. CIT owned Thames Global, parent of Infrastructure Company (ICL), which would hold GDRs for investment in family-controlled companies. Thereafter, $400 million was allegedly brought into ICL through Tocan Asset Trading, a BVI company owned by Damani.

The I-T department has an HSBC note that documents this $400-million transfer. The I-T department also has documents showing that ICL invested $400 million, for the purchase of GDRs of Reliance Port & Terminal (RPTL) and Reliance Utility & Power (RUPL).

The Notice reportedly says that “As per Section 3 of the BM (UFI&A) & IT Act, any undisclosed assets located outside India shall be charged of tax on its value in the previous year in which such asset come to the notice of assessing officer.”

[email protected]