High Value Suspicious Declarations made under the IDS 2016

By Vijay Kumar

THE Deputy Editor of a Gujarat based business newspaper mailed me:

I am xxx deputy editor of a Gujarat based business newspaper. I am a regular reader of your DDT columns on Taxindiaonline.com.

I am sure you must have already read about Mahesh Shah, a resident of Ahmedabad who had declared Rs13,860 crore as unaccounted cash under the Income Declaration Scheme (IDS).

The declaration is around 20% of the total under the IDS in the country. However, there are various questions that are left unanswered:

1. Why the IT department cancelled his declaration ahead of first instalment?

2. Why did IT department not wait till Mahesh Shah defaults (if he did not have such money as per declaration) to pay the first instalment of tax under the scheme on November 30.

3. Why did a chartered accountant entertain a person who was not his regular client?

4. Did IT department make necessary checks before accepting his declaration?.

He wanted me to raise these questions in DDT.

The Government yesterday clarified:

In the recent Income Declaration Scheme (IDS), 71,726 declarants had declared an amount of Rs. 67,382 crore. Among the declarations received, there were two sets of declarations of high value which were not taken on record in the above figure because these declarations were found to be suspicious in nature being filed by persons of small means.

A family of four declarants namely, Mr. Abdul Razzaque Mohammed Sayed (self), Mr. Mohammed Aarif Abdul Razzaque Sayed (son), ShrimatiRukhsana Abdul Razzaque Sayed (wife) and Ms. Noorjahan Mohammed Sayed (sister) who were shown as residents of Flat no. 4, Ground Floor, Jubilee Court, 269-B, T.P.S-III, Linking Road, Bandra (W), Mumbai, filed a total declaration of Rs. Two lakh crore (Rs. 2,00,000 crore). Three out of the four PAN numbers were originally in Ajmer which were migrated to Mumbai in September 2016, where the declarations were filed.

The other declaration was filed by one Mr. Mahesh Kumar Champaklal Shah resident of 206, Mangal Jyot Tower, Jodhpur Gram Satellite, Ahmedabad for an amount of Rs. Thirteen Thousand Eight Hundred and Sixty crore (Rs.13,860 crore).

These declarations from Mumbai and Ahmedabad were kept pending for investigation about the genuineness of the same and were not included in the total value of declarations announced on 1st October, 2016. After due enquiry, it was found that these declarants were persons of suspicious nature and very small means and the declarations could have been misused.

Therefore, after due consideration, the Income Tax Department decided by 30th November, 2016, to reject these two sets of declarations of Rs.Two Lakh Crore and Rs. Thirteen Thousand Eight Hundred and Sixty Crore respectively. The Department has since commenced enquiries against these declarants to determine the intention behind these false declarations.