Wednesday, March 9, 2011

Tax demand on Hasan Ali and associates: 71,845 crore

New Delhi: What exactly is the tax demand on Hasan Ali Khan and his associates? For a while, a figure of Rs 40,000 crore has been doing the rounds, though some tax officials were questioning the veracity of this figure. However, the government is now learnt to have raised a tax demand of Rs 71,845 crore.
This figure, which is larger than the country’s health budget and its annual service tax collections, includes a demand of Rs 50,329 crore on Khan himself, Rs 49 crore from his wife Rheema, Rs 591 crore from his alleged associate Kashi Nath Tapuriah and Rs 20,540 crore from his second wife Chandrika Tapuriah, revealed sources in the income tax department.
Of the total tax demand of Rs 71,845 crore, the I-T department has adjusted only Rs 60 lakh which was recovered from raids on Khan and the Tapuriahs. The appeal is now pending before the Income Tax Appellate Tribunal. Even the Comptroller and Auditor General is learnt to be looking into the issue.
Although investigations have been on since 2007, tax authorities were not really seen to be pushing the case till the Supreme Court turned up the heat. Interestingly, the Centre had filed an affidavit in the Supreme Court in 2009 itself stating that the I-T department has raised a demand of Rs 71,848.59 crore against Khan, his wife Rheema and other associates.
Government officials, however, said the demand was made following information collected by them from a pen drive and laptop recovered during a raid on Hasan Ali and the Tapuriahs. They further said the scope of the probe has been widened to include at least six more countries, which may further push up the demand on Khan. The I-T department is investigating Khan’s investment links in these countries.
At nearly Rs 72,000 crore, the tax demand is nearly half the amount locked up in all tax disputes (direct and indirect), which were estimated at Rs 1.43 lakh crore at the end of March 2010, not including the demand on Khan.

Judge to ED: No case, do your homework

The Enforcement Directorate (ED) told a sessions court on Wednesday that alleged money launderer Hasan Ali Khan has admitted transferring $700,000 (more than Rs 3 crore) from his Sarasin Bank account in Switzerland to the Barclays Bank account of S K Financial Services UK through Citibank New York. This statement, however, did not make an impact on principal sessions judge M L Tahaliyani. The judge asked the directorate to do some homework and argue the case afresh on Thursday. The agency was trying to convince the court that Khans case falls under the purview of the Prevention of Money Laundering Act. When ED’s counsel Nitin Punde failed to convince the court, the judge suggested that they do their homework and return on Thursday. Ali will be in ED custody till then. The court was also not impressed with Punde’s statement that the Supreme Court was hearing a public interest litigation where the government was criticised for not acting against him.

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