Around ₹196 crore found in the Swiss bank account of an 80-year-old elderly woman, who claims a monthly income of around ₹14,000. The Mumbai branch of the Income Tax Appellate Tribunal (ITAT), has ordered the woman to pay a penalty along with the tax.
Renu Tharani, whose case was heard by ITAT, is in her eighties. She was the sole beneficiary of a Swiss bank account, held by the Tharani family trust, in HSBC Geneva. It was opened in July 2004 in the name of GW Investment Bank based in Cayman Islands. This company, in its capacity as the settlor, had transferred funds to the family trust. According to a few I-T officials, most of the time NRIs with overseas trusts deny foreign bank accounts.
Tharani did not give this information in the IT return that was filed in 2005-06. She stated her annual income as just ₹1.7 lakh. She gave an address in Bengaluru and described herself as an Indian taxpayer. Tharani also served an affidavit stating that she does not have a bank account in HSBC Geneva nor was she a director or a shareholder in GW Investment Bank. She even described herself as a non-resident and claimed that even if there is any amount, she cannot be taxed for that.
The ITAT Bench said that it may have been that she was in her first year of non-residential status. The bench could not figure out where did she accumulate 200 crore rupees in her bank account in such short period. The bench also said that she isn't even a public figure or runs a charity that this amount would have been given to her trust.
The case was reopened on 31 October 2014. In this case, the I-T officer submitted to ITAT that unaccounted money is deposited in Swiss bank accounts through a complex web of overseas trusts, entities and use of nominee directors. But Tharani claimed to be a non-resident and contested the alleged income, if any, cannot be taxed in her hands.
The taxpayer, though, had now submitted this was the first year of her 'non-residential' status. Even if one goes by this submission, it is unrealistic to assume in a short period of a year, nearly Rs 200 crore at her disposal in the Swiss Bank account, reflects income earned outside India. Based on her previous income declaration, it would have taken her more than 10,000 years to earn the amount stashed in the Swiss bank account. ITAT said,
The taxpayer is not a public personality like Mother Teresa, that some person with complete anonymity will settle a trust to give her $4 million and in any case, Cayman Islands is not known for philanthropists operating from there. If Cayman Islands is known for anything relevant, it is known for an atmosphere conducive to hiding unaccounted wealth and money laundering and that does not advance the case of the taxpayer.