* Switzerland, one of the most popular destinations for those stealing monies from India, had told GoI last year that it was ready to reveal the names of Indians who had parked illegal funds in its banks. The names, however, cannot be disclosed till the Double Taxation Avoidance Agreement (DTAA) that the two countries signed in August last year, is ratified by Parliament.
* While a number of countries have been able to recover huge amounts of illegal funds parked abroad (see box 1), India has not been able to do so because it has not signed any tax information exchange agreement with any country. Why?
Pune based stud farm owner Hassan Ali Khan, is being investigated by Enforcement Directorate and Income Tax Department. He and his wife Rheema, along with his business associate Kashinanth Tapuriah and his wife Chandrika Tapuriah are accused of having deposited $ eight billion with a Zurich based UBS AG Bank. The Income Tax Department has served him a notice for Rs. 50000 crores and to Chandrika Tapuriah for another Rs 20,000 crores.
Unmindful of the gravity of the charge and tax liability, Hassan Ali Khan has been spotted by the media enjoying horse races, for the case against him will be difficult to sustain in a court of law. It is nearly impossible for the Indian authorities to gather evidence of his accounts in Switzerland. The Swiss will share information only in cases of dual criminality i.e. the offence has to be a crime – both in Switzerland and the complaining country. Tax evasion is not a criminal offence in Switzerland. And here is the catch.
Why Hassan Ali Khan has been charged only with tax evasion? If he was charged with Tax fraud and other criminal offences, the Swiss would have been obliged to provide the Indian authorities with details of his illegal accounts. With this evidence; he would have been nailed as per the Indian law. The names of all the beneficiaries of his sordid enterprise, would have become public.