Ministry of Corporate Affairs

Income Tax Department continues to strike in J&K Region

Dated: 27 JUN 2019

The Income Tax Department conducted search and seizure operations on 27.06.2019 on a prominent business group based in Srinagar, covering 4 premises in the Kashmir Valley and 6 places in the Jammu region. Apart from the premises in J&K, 10 other business premises situated in Ludhiana, NCR and Jammu belonging to parties that have actively assisted the main tax evader in concealing his income and indulging in illegal activities have also been covered under survey action. The group is engaged in the business of real estate and information technology. There were allegations of large scale diversion and misappropriation of loan taken from J&K Bank by the group.

During the search, it was detected that the tax evader has been given illegal benefit of Rs 60 crore by J&K Bank. His outstanding loan of Rs 190 crore was settled at Rs 130 crore, although he did not deserve any concessional treatment. Additionally, even the reduced bank liability has either been defaulted by him or the repayment has been facilitated by active connivance of bank officials, who have ever greened his loan account by lending to third parties, who, in turn, gave their loaned funds to the tax evader through dubious financial transactions with him.

During the search operation, evidence was found that the main promoter was a director in a Dubai based company. He is also holding and operating a foreign bank account. Neither his interest in the Dubai Company nor the foreign bank account has ever been disclosed by him in his tax returns. He is likely to face action under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 as well as other relevant laws of the land for deliberate omission to declare foreign investment as mandated by law.

Field enquires have also revealed that the tax evader has sold/booked part of his real estate project of Paradise Avenue near Jammu against unaccounted cash. The cash component has neither been disclosed in tax returns by purchasers of the flats of Paradise Avenue nor has he disclosed these receipts in his books of accounts.

Other than the Paradise Avenue project, the tax evader has also undertaken real estate transactions in his personal capacity or in the name of family members wherein allegedly more than Rs 7 crore of unaccounted cash has changed hands.

During the demonetisation period, the group had made cash deposits of Rs. 1.44 crore. The main promoter could not explain the source of these cash deposits during the course of search action.

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DSM/RM/KMN
(Release ID: 1576093)

 

F No 370149/230/2017

Government of India

Ministry of Finance

Department of Revenue

Central.Board of Direct Taxes

(TPL Division]

New Delhi, June 24, 2019

OFFICE ORDER

1. In order to review the existing Income-tax Act, 1961 and to draft a new direct tax law in consonance with economic needs of the country, the Government had constituted a Task Force vide Office Order of even number dated 22.11.2017, the Terms of Reference (ToR) being drafting an appropriate direct tax legislation keeping in view:

(i) the direct tax system prevalent in various countries,

(il) the international best practices.

(iii) the economic needs of the country and

(iv) any other matter connected there to.

2. The Task Force was reconstituted under the Convenorship of Shri Akhilesh Ranjan, Member (Legislation], CBDT vide Order of even number dated 26.11.2018 and the Convenor was authorised to co-opt any person as Member. Accordingly, Ms Pragya S Saksena IRS 87004 has been co-opted as Member on 21.12.2018.

3. Shri Arvind Subramanian, Chief Economic Adviser (CEA] was a permanent special invitee to the Task Force as per the order dated 22.11.2017. He has since demitted the office and Shri Krishnamurthy Subramanian has taken over as the CEA. It has been decided to nominate Shri Subramanian as member of the Task Force.

4. It has been further decided that the ToR shall be broadened to include:

(i) The Faceless and anonymised verification/ scrutiny/ assessment

(ii) The mechanism for system based cross verification of the financial transactions

(iii) Reduction in litigation and expeditious disposal of appeals before the CIT (Appeals), ITAT, High Courts and Supreme Court

(iv) Reduction of compliance burden by simplification of procedures ,

(v). Sharing of information between GST, Customs, CBDT, FIU

5. In view of the expanded ToR which includes sharing of data between agencies, it has been decided to nominate Shri Ritvik Pandey, Joint Secretary (Revenue) as member of the Task Force as well.

6. Other terms and conditions of the orders Issued till now shall remain the same.

7. This issues with approval of the Finance Minister.

Press Information Bureau 
Government of India
Ministry of Finance

12 JUN 2019

Ratification of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting

The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, has approved theratification of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI)

Impact:

The Convention will modify India's treaties in order to curb revenue loss through treaty abuse and base erosion and profit shifting strategies by ensuring that profits are taxed where substantive economic activities generating the profits are carried out and where value is created.

Details:

i.      India has ratified the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting, which was signed by the Hon'ble Finance Minister Sh. Arun Jaitley at Paris on 07/06/2017 on behalf of India.

ii.     The Multilateral Convention is an outcome of the OECD / G20 Project to tackle Base Erosion and Profit Shifting (the "BEPS Project") i.e., tax planning strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations where there is little or no economic activity, resulting in little or no tax being paid. The BEPS Project identified 15 actions to address base erosion and profit shifting (BEPS) in a comprehensive manner.

iii.    India was part of the Ad Hoc Group of more than 100 countries and jurisdictions from G20, OECD, BEPS associates and other interested countries, which worked on an equal footing on the finalization of the text of the Multilateral Convention, starting May 2015. The text of the Convention and the accompanying Explanatory Statement was adopted by the Ad hoc Group on 24 November 2016.

iv.     The Convention enables all signatories, inter alia, to meet treaty-related minimum standards that were agreed as part of the Final BEPS package, including the minimum standard for the prevention of treaty abuse under Action 6.

v.    The Convention will operate to modify tax treaties between two or more Parties to the Convention. It will not function in the same way as an amending protocol to a single existing treaty, which would directly amend the text of the Covered Tax Agreement. Instead, it will be applied alongside existing tax treaties, modifying their application in order to implement the BEPS measures.

vi.   The Convention will modify India's treaties in order to curb revenue loss through treaty abuse and base erosion and profit shifting strategies by ensuring that profits are taxed where substantive economic activities generating the profits are carried out and where value is created.

Background:

The Convention is one of the outcomes of the OECD/G20 project, of which India is a member, to tackle base erosion and profit shifting. The Convention enables countries to implement the tax treaty related changes to achieve anti-abuse BEPS outcomes through the multilateral route without the need to bilaterally re-negotiate each such agreement which is burdensome and time consuming. It ensures consistency and certainty in the implementation of the BEPS Project in a multilateral context. Ratification of the Multilateral Convention will enable application of BEPS outcomes through modification of existing tax treaties of India in a swift manner. The Cabinet Note seeking ratification of the MLI was sent to the Cabinet on 16.04.2019 for consideration. Since the said Note for Cabinet could not be taken up in the Cabinet, due to urgency, the Hon'ble Prime Minister vide Cabinet Secretariat I.D. No. 216/1/2/2019-Cab dated 27.05,2019 has approved Ratification of MLI and India's Final Position under Rule 12 of the Government of India (Transaction of Business) Rules, 1961 with a direction that ex-post facto approval of the Cabinet be obtained within a month. Consequent to approval under Rule 12, a separate request has already been sent to L&T Division, MEA for obtaining instrument of ratification from the Hon'ble President of India vide this office OM F.No. 500/71/2015-FTD-I/150 dated 31/05/2019.

 

Press Information Bureau

Government of India

Ministry of Commerce & Industry

12 JUN 2019

Cabinet approves the Special Economic Zones (Amendment) Bill, 2019

The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, has approved to introduce a Bill, namely, the Special Economic Zones (Amendment) Bill, 2019 that is the Bill to replace the Special Economic Zones (Amendment) Ordinance, 2019 (12 of 2019).  The Bill will be introduced in ensuing session of the Parliament.

After the amendment of sub-section (v) of section 2 of the Special Economic Zones Act, 2005, a trust or any entity notified by the Central Government will be eligible to be considered for grant of permission to set up a unit in Special Economic Zones.

Press Information Bureau

Government of India

Ministry of Finance

Dated: 06 JUN 2019

Agreement for Exchange of Information between India and Marshall Islands notified

The Agreement between the Government of the Republic of India and the Government of the Republic of the Marshall Islands for the Exchange of Information with respect to taxes (India – Marshall Islands TIEA) was signed on 18thMarch, 2016 at Majuro, the Republic of the Marshall Islands. The India-Marshall Islands TIEA has been notified in the Gazette of India (Extraordinary) on 21st May, 2019.

The Agreement enables exchange of information, including banking and ownership information, between the two countries for tax purposes. It is based on international standards of tax transparency and exchange of information and enables sharing of information on request. The Agreement also provides for representatives of one country to undertake tax examinations in the other country.

The Agreement will enhance mutual co-operation between India and Marshall Islands by providing an effective framework for exchange of information in tax matters which will help curb tax evasion and tax avoidance.

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DSM/RM/KMN

Click here to read and download the Government of India Notification No.40/2019 /F.No. 503/1/2018-FT & TR– IV dated May 21, 2019