Black money: Govt to name offenders, SC told

The Centre on Thursday assured the Supreme Court that it would reveal the names of persons, who have stashed black money in foreign banks after registering a formal case against them.

Solicitor General Gopal Subramanium, appearing before a bench headed by Justice B Sudershan Reddy, said the government has issued show cause notices against the persons accused of having black money in foreign banks and once a case is registered against them, their names will be made public.

The bench also asked the government to ensure that Hassan Ali Khan, a Pune-based businessman, accused of stashing money in foreign banks, does not leave the country.

"It's your duty to ensure that he is available to face prosecution," the court said when Subramanium informed it that Hasan is in India and the government is taking all necessary steps against him.

The court was hearing a petition filed by noted lawyer Ram Jethmalani and some former bureaucrats seeking the court's direction to the government to bring black money, said to be the tune of $1 trillion, back to the country.

Senior advocate Anil Divan appearing for Jethmalani contended that the government is not taking effective steps in this direction.

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Referring to an article in which it was reported that Letters Rogatory have been issued to authorities in five countries --the United Arab Emirates, the United Kingdom, the United States of America, Singapore and Hong Kong -- seeking information regarding black money, he submitted that nothing more has been done in this regard.

Countering Divan's arguments, the solicitor general accepted that Letter Rogatory has been issued and said the government has taken "remarkable" steps in the case of black money.

Placing before the court a sealed envelope, Subramanium said all this information has been given in it. At the end of the brief hearing, the bench asked whether Hassan Ali can be made a party to the proceedings before it.

The court then adjourned the matter for further hearing on March 3.

Even as the hullabaloo over black money stashed in foreign bank accounts continues, the weekly magazine Tehelka claimed on February 4 to have unearthed a list of Indians who deposited their wealth in a European bank. Tehelka magazine said two years ago the German government had passed on the names and bank account details of 18 Indians who had invested their wealth in the LGT bank in Liechtenstein, a well-known tax haven. Some of these are said to be diamond merchants.

The magazine claims to have possession of 16 of the 18 names on the list, which the Manmohan Singh government chose not to make public.

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With the list out in the open, an already embattled government now faces a fresh round of fire from the Opposition.

The Opposition, led by the Bharatiya Janata Party, has been vociferously demanding over the last few months for the names to be made public.

Black money parked in tax havens abroad will be taxable income under the Direct Taxes Code Bill, the Centre had told the Supreme Court on February 9, spelling out a host of measures to retrieve it.

The government also informed the apex court that it has completed negotiations for Tax Informations Exchange Agreement with 10 countries where the money is believed to have been stashed.

The ten countries are Bahamas, Bermuda, British Virgin Island, Isle of Man, Cayman Island, British island of Jersey, Monaco, St Kitts and Nevis, Argentina and Marshall Island.

Cabinet approval has been granted in relation to eight of these agreements, it said.

"It is submitted that the central government has proposed new provisions for unearthing black money in the Direct Taxes Code Bill by defining taxable assets as inclusive of the deposits in banks located outside India in case of individuals and such bank deposits not recorded in the books of account in case of others," an additional affidavit filed by the Ministry of Finance said.

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On Januray 25, Union Finance Minister Pranab Mukherjee had said that the Indian government had nothing to hide, but the names (of those who have stashed black money abroad) "cannot be revealed as it violates international law".

Addressing a press conference in New Delhi, while outlining the government's strategy to tackle the menace of black money and on the stashing of illicit wealth overseas, the finance minister had said that there are no reliable estimates of black money generated by Indians within and outside the country, but it is roughly estimated at being between Rs 500 billion and Rs 1,400 billion.

He said that the various estimates of black money are only unverifiable assumptions and approximations.

"No information can be made available from any other sovereign government unless there is a legal framework. We are not hiding behind the double taxation avoidance pacts," said the finance minister.

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The finance minister dismissed the criticism that it was not disclosing information because such disclosure could result in the government's fall.

Asserting that the government was "not afraid of the danger to the coalition in not disclosing the names of black money holders abroad," Mukherjee asserted: "We will complete our full term."

The Supreme Court had earlier slammed the government again over the issue of illicit wealth parked in foreign banks, asking it to file a report on the action taken by it against people and firms that have stashed black money in tax havens abroad.

Expressing concern that the black money stashed in banks abroad might have originated from arms deals, drug trafficking and smuggling, the Supreme Court asked the government as to what action it had taken against individuals and firms having foreign accounts.