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).

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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, has said that the global economic risks and imbalances reinforce the need to strengthen global co-operation at the multilateral level, besides governmental initiatives. She stated this in her intervention during International Monetary and Financial Committee (IMFC) Plenary Session yesterday in the ongoing Annual Meetings 2019 of the IMF and World Bank being held in Washington DC, USA. At the National level, a calibrated and balanced approach to deploying a mix of fiscal, monetary and structural measures by countries can help achieve their growth potential, the Finance Minister added.

Smt. Sitharaman further stated that International Monetary Fund (IMF) should provide solutions that are specific to important growth geographies to help alleviate the current conundrum. The Finance Minister also stated that the IMF should evolve a policy framework that would assess the vulnerability of economies to capital flows and that developing stronger surveillance mechanism with sharper diagnostic tools can mitigate or even prevent the adverse effects on fragile economies. On the 15th Round of the IMF’s General Review of the Quotas (15th GRQ) likely to conclude without a quota increase, the Finance Minister stated that work on the 16th Round should begin in right earnest and should have a tight timeframe.

The Finance Minister also attended International Monetary and Financial Committee (IMFC) Restricted Breakfast .

Smt. Sitharaman later participated in the 100th Meeting of the Development Committee Plenary. The items on the agenda included the World Development Report 2020: Trading for Development in Age of Global value Chains; Jobs and Economic Transformation (JET): Drivers, Policy Implications and WBG Support theme for IDA; Human Capital Project: An update; and IDA Voting Rights Review: Report to Governors. In her intervention at this session, the Finance Minister mentioned that as we draw closer to SDG 2030, India is pursuing both scale and speed of development, through large National missions in a fiscally responsible, sustainable and inclusive manner. These programs range widely from solar energy to direct benefit transfer, from skilling to sanitation. But there is a common approach: to improve incomes, reduce deprivation and enhance living standards. Smt. Sitharaman also stated that in pursuing investment led growth, we should not neglect sustainability, efficiency and transparency in debt and tax policies. Moreover, investments must generate domestic revenues that can be channelized into effective public spending in health, education and skilling so that youth can benefit from the economic growth. The Finance Minister encouraged IMF to guide concerted international action to combat illegal financial flows and welcomed collaboration to push investment to augment MDB financing into developing countries.

She concluded her engagements with a press conference where she talked about the highlights of this visit. 

The Finance Minister is currently on an official tour to Washington DC to attend the Annual Meetings of the International Monetary Fund and the World Bank and other associated meetings. She is accompanied by Mr. Shaktikanta Das, Governor, RBI; Secretary Economic Affairs, Shri Atanu Chakraborty; and other officials.

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RM/KMN
(Release ID: 1588535)