Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

New Delhi, 11 th November, 2019

PRESS RELEASE

Income Tax Department busts a major racket of bogus billing & hawala transactions

Income Tax Department carried out searches in the first week of November, 2019 on a group of persons indulging in issuing bogus bills and carrying on hawala transactions. The search operations covered 42 premises across Delhi, Mumbai, Hyderabad, Erode, Pune, Agra & Goa.

The search operations resulted in busting of a major racket of cash generation by leading corporate houses in the infrastructure sector through bogus contracts/bills. Funds meant for public infrastructure projects were siphoned off through entry operators, lobbyists and hawala dealers. The companies involved in siphoning of funds are mostly located in NCR and Mumbai. One such company was earlier searched by Income Tax Department in April, 2019.

The projects involved in bogus billings are major infrastructure and EWS projects located in Southern India. Evidence of cash payment of more than Rs. 150 crore to a prominent person in Andhra Pradesh has also been unearthed during the search.

The search action was successful in unearthing incriminating evidences and establishing the nexus between big corporates, hawala operators and identification of entire chain of delivery, as well as siphoning of funds by way of bogus contracts to the tune of Rs. 3300 crore. Unexplained cash of Rs 4.19 crore and jewellery in excess of Rs 3.2 crore was also seized during the search operation.

(Surabhi Ahluwalia)

Commissioner of Income Tax

(Media & Technical Policy)

Official Spokesperson, CBDT.

 

Ministry of Finance

Cabinet approves protocol amending the Convention between India and Brazil for the avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income

Dated: 06 NOV 2019

The Union Cabinet Chaired by the Prime Minister Shri Narendra Modi approved the signing of the Protocol amending the Convention between the Government of the Republic of India and the Government of the Federative Republic of Brazil for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income.

Implementation Strategy and Targets:

After Cabinet approval, necessary formalities for bringing the Protocol into force will be completed. Implementation would be watched and reported by the Ministry.

Major impact:

Through updation of the Double Taxation Avoidance Convention’s (DTAC's) provisions to international standards, the Amending Protocol between India and the Federative Republic of Brazil will facilitate elimination of double taxation. Clear allocation of taxing rights between Contracting States through DTAC will provide tax certainty to investors & businesses of both countries. The Amending Protocol will augment the flow of investment through lowering of tax rates in source State on interest, royalties and fees for technical services. The Amending Protocol implements minimum standards and other recommendations of G-20 OECD Base Erosion Profit Shifting (BEPS) Project. Inclusion of Preamble Text, a Principal Purpose Test, a general anti abuse provision in the DTAC along with a Simplified Limitation of Benefits Clause as per BEPS Project will result in curbing of tax planning strategies which exploit gaps and mismatches in tax rules

Point-wise details:

a.   The existing DTAC between India and Brazil was signed on 26th April, 1988 and was amended through a Protocol signed on 15th October 2013 in respect of exchange of information. Through the present Protocol, the DTAC has been amended on various other aspects.

b.   The amended DTAC also implements the minimum standards as well as other recommendations of the G-20 OECD Base Erosion and Profit Shifting (BEPS) Project.

Background:

The existing Double Taxation Avoidance Convention (DTAC) between India and Brazil being very old was required to be amended to bring it in line with international developments and also to implement the recommendations contained in the G20 OECD Base Erosion and Profit Shifting Project (BEPS).

***

VRRK/SC/SH

 

Ministry Of Law & Justice

Shri Justice Sharad Arvind Bobde to be the next Chief Justice of India

Dated: 29 OCT 2019

The President has appointed Shri Justice Sharad Arvind Bobde, Judge of the Supreme Court as the next Chief Justice of India with effect from November 18, 2019.

Shri Justice Sharad Arvind Bobde has been a Judge of the Supreme Court since April 12, 2013. Earlier he served as the Chief Justice of the Madhya Pradesh High Court for about six months since October 16, 2012. He has also been an Additional Judge of the Bombay High Court from March 29, 2000 and a Permanent Judge from March 28, 2002.

Shri Justice Bobde, born on April 24, 1956, was enrolled as an Advocate on September 13, 1978. He started his practice at the High Court Bench at Nagpur and the District Court at Nagpur and occasionally at the High Court at Bombay and the Supreme Court of India in civil, constitutional, labour, company, election and taxation matters. He specialized in constitutional, administrative, company, environmental and election laws.

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KSD/PK

(Release ID: 1589432)

Income Tax Department conducted search operation on a group based in Delhi in connection with tax evasion and money laundering. The group is engaged in various e-governance projects and financial services. It has presence across several cities in India and also in Dubai.

The search and seizure action have led to unearthing of several incriminating evidence establishing large scale tax evasion, hawala transaction and money laundering by the said taxpayer group. The group has taken recourse to use of shell companies based in Delhi / Kolkata to route unaccounted money.

Earlier, the Department had conducted search action on entities related to Fertilizer procurement. Investigations had revealed that huge amount of commission was being collected in Dubai through shell companies of a Dubai based operator who is also an accused in a VVIP Chopper scam. A part of such commission was laundered back to India through the aforesaid Delhi based group.

Preliminary enquiries reveal the quantum of accommodation entries and hawala transactions to be more than Rs. 1000 crore.

RM
(Release ID: 1588949)

Union Finance Minister Smt. Nirmala Sitharaman led the Indian delegation to the Annual Meetings Plenary session of the International Monetary Fund (IMF) and the World Bank Group held in Washington DC yesterday . She also attended the Working Lunch Session of the Development Committee (DC), the ministerial-level committee of the IMF and the World Bank. In the DC Lunch, the members discussed about the global economic outlook. In her intervention, the Finance Minister mentioned that trade wars and protectionism have generated uncertainties that will ultimately impact flow of capital, goods and services. She called for ‘concerted action’ to mitigate the disruption on account of synchronous slowdown and to invoke the spirit of multilateralism for global growth. She further said that the increased trade integration, geopolitical uncertainties, and high accumulated debt levels necessitate strong global coordination and that we need not wait for the slowdown to become a crisis.

The 40^th meetings of the International Monetary and Financial Committee (IMFC) of the IMF are being held at this year’s Annual Meetings. During the day, three sessions of the IMFC took place. The IMFC Introductory Session was focused on Global Developments and Prospects and the discussions centred on the World Economic Outlook released on October 15, 2019. The Early Warning Exercise discussed upcoming risks to global economy and stability. A special session on IMF resources and governance was also held early in the day, in the context of the 15^th Round of the quota discussions concluding this year. Secretary, Department of Economic Affairs, Shri Atanu Chakraborty, led the Indian delegation at this session.

Earlier in the day , Finance Minister Smt. Nirmala Sitharaman also led the Indian delegation to the G20 Finance Ministers and Central Bank Governors meeting in which the deliberations centred on international taxation and Stablecoins. The Ministers and Governors also took updates from the G20 Deputies on Quality Infrastructure Investment, Debt Sustainability, Financing for Universal Health Care and Building Effective Country Platforms, and from the Africa Advisory Group on the Compact with Africa (CwA) initiative. On the discussions at the session regarding the work underway on developing a consensus solution on tax challenges arising from digitalization, the Finance Minister stated that a unified approach to the nexus and profit allocation challenges is a promising one that merits serious attention. A solution that is simple to implement, simple to administer and simple to comply with is needed.

On the side-line of the above meetings, the Finance Minister held several bilateral meetings, including with the First Deputy Prime Minister and Finance Minister of Russia, Mr. Anton Siluanov; Finance Minister of the Kyrgyz Republic, Ms. Baktygul Jeenbaeva; Finance Minister of Switzerland, Mr. Ulei Maurer; the Australian Treasurer, Mr. Josh Frydenberg; and the Finance Minister of Maldives, Mr. Ibrahim Ameer. In these meetings, the two sides discussed issues of common interest.

Secretary , Economic Affairs , Shri. Atanu Chakraborty also held a few one-on-one meetings on the side-lines. He met the Director General of the French Treasury, Ms. Renaud Basso; and the Chief Financial Officer of the World Bank, Ms. Anshula Kant. He also addressed investors in a session organized by JP Morgan.

The Finance Minister is currently on an official tour to Washington DC to attend the Annual Meetings of the IMF and the World Bank and other associated meetings. She is accompanied by Secretary, Department of Economic Affairs, and other officials from the Department.

 

 

Union Minister for Finance & Corporate Affairs Smt. Nirmala Sitharaman attends the Annual Meetings Plenary session during the ongoing International Monetary Fund-World Bank's Annual Meetings 2019 in Washington DC on 18th October 2019.

RM/KMN
(Release ID: 1588504)