19 Aug 2020
Indian taxpayers appear a step closer to reaping millions of dollars their fellow citizens have stashed illicitly in secrecy jurisdictions, following a recent landmark ruling against the elderly beneficiary of an undeclared Swiss bank account.
Based on her declared taxable income of less than $4,000 in 2006, the powerful Income Tax Appellate Tribunal (ITAT) noted it would have taken Renu Tikamdas Tharani about 11,500 years to earn the $39.7 million held in the HSBC account in Geneva at the time.
Tharani, who is now in her late 80s and appears to be a U.S. resident, is among the Indian citizens whose names have been linked to Swiss Leaks, the International Consortium of Investigative Journalists-led investigation published in 2015, which exposed how the Swiss private banking arm of HSBC profited from doing business with tax dodgers and criminals around the world.
Using the HSBC account information, Indian authorities began reassessing tax returns going back 16 years and Tharani’s discrepancies came to light.
The tribunal found that Tharani was the sole beneficiary of a Swiss account linked to Cayman Islands-based GWU Investments, operated by the Tharani family trust.
She maintained ignorance of the origins of the cash in the account, denying it was in her name.
She also argued that she had been non-resident for tax purposes in India for the period under investigation and under Indian law did not even have to declare income earned overseas.
The tribunal dismissed her assertions, putting the onus firmly on her to prove she did not own the assets in the account and provide details of where the money came from, something she had refused to do.
“If a person has nothing to hide, we believe the person would have cooperated in obtaining the bank statements,” it said in a 55-page judgment delivered on July 16.
By Douglas Dalby, ICIJ, 18 August 2020
Read more at the International Consortium of Investigative Journalists
RiskScreen: Eliminating Financial Crime with Smart Technology
You can claim CPD minutes for this content, by signing up to our CPD WalletFREE CPD Wallet