I-T Dept gets Rs 1,996 cr, SBI Rs 199 cr from Harshad Mehta assets

Our Bureau Mumbai | Updated on March 16, 2011

Custodian liquidates FDs to clear claims

The Income-Tax Department and the State Bank of India have received a small revenue booster in the run-up to the financial year-end. This is courtesy the Custodian dealing with the 1992 securities market scam.

The I-T Department and India's biggest bank received Rs 1,996 crore and Rs 199 crore respectively on Wednesday from the Custodian in respect of pending claims against the Harshad Mehta Group. The Custodian liquidated fixed deposits to make the payments.

Earlier, the Department and SBI received Rs 1,200 crore and Rs 600 crore respectively from recoveries made by the Custodian from the Harshad Mehta Group.

Total liability

Following today's payment, Harshad Mehta Group's liability (principal amount) to the I-T Department has been discharged, said Mr Satish Loomba, Custodian.

Taking into account interest and compounding of levies from 1992, the total liability of the Harshad Mehta Group adds up to around Rs 20,000 crore, said Ms Nilima Mansukhani, Chief Commissioner of Income-Tax (Central).

Once the principal amounts due to the I-T Department and banks and financial institutions are recovered, the Custodian will try to recover interest and levies, provided assets — immovable property (land and residential property) and equity shares — are leftover.

The principal amount due to SBI from the HMG group is Rs 1,000 crore; Standard Chartered Bank (Rs 500 crore) and Canara Bank Financial Services (about Rs 20 crore), said Mr Loomba.

“The payments are interim in nature and have been released by the Custodian on the basis of undertaking submitted by the Department of Revenue, Government of India, and SBI that the amounts will be brought back, if so ordered by the Special Court,” the Custodian said in a statement.

Forty-five other notified entities, involved in the securities market scam, collectively owe the I-T Department and Banks about Rs 1,500 crore.

If interest and levies are compounded from 1992, then the total liability of the Harshad Mehta Group and 45 notified entities collectively works out to around Rs 34,000 crore, said Ms Mansukhani.

Published on March 16, 2011

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