Money & Banking

HSBC Geneva a/c case: ITAT sends back case involving NRI for further investigation

PALAK SHAH Mumbai | Updated on July 11, 2018



The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has sought further investigation into one of the cases linked to HSBC’s Geneva branch involving a US-based NRI, Rahul Rajnikant Parikh.

A list of people of Indian origin having bank accounts in Geneva was handed to India by France in 2011. More than 1,000 deposit holders of Indian origin in HSBC’s Geneva branch are under the scanner of tax and other investigating agencies for holding black money.

Parik, a diamond merchant who has been an NRI since 1987, was held accountable by the tax department for his deposits in HSBC, Geneva, on the ground that the address of the bank account was that of India. The tribunal has said that this alone cannot be a ground to hold Parikh responsible, and remanded the matter for further investigation.

Indian citizenship

An earlier probe had revealed that Parikh had surrendered his Indian citizenship in 2000, but used his Indian passport to open the HSBC bank account. To build its case, tax officials further relied upon a newspaper article, which narrated how diamond trade in India was used for money laundering. Parikh is among the 77 diamond merchants who are under probe by tax authorities in Mumbai.

Another aspect, which the assessing officer relied upon for the case, was the fact that Parikh was a joint account holder with one Kalpesh Jhaveri, and both are partners in KR Jems, an Indian firm.

Also, the assessee did not give any cogent reply when he was asked if the bank account was disclosed to the US authorities. The tribunal said that suspicion of the assessing officer on these circumstances was not unfounded that the account could have Indian origin.

But the tribunal found that the assessing officer had added the full amount of deposits twice in the name of both account holders to arrive at the tax and penalty, the reason for which was not spelt out.

Also, the narration in the bank account does not indicate whether the money was of Indian origin and, hence, further investigation was required.

Published on July 11, 2018

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