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--------------- Print Magazine --------------
 
  May 2016
 
  April 2016
 
 
 
 
LEGAL ARTICLE
PLUGGING THE BLACK HOLE
Joginder Singh

ght appear amazing that what the entire world including the man in the streets in India knows, about black money,   our Government  says that it does not know  or pretends not to know.

Swiss Banking Association report, 2006 details top bank deposits in the territory of Switzerland by nationals of following countries: dia $1,456 Billion
Russia $470 Billion
U.K. $390 Billion
Ukraine $100 Billion
China $96 Billion

The Government says that it has no idea about the extent of the money, which has been secreted abroad. It might be right to a limited extent, as the legal banking channels are never used for  sending and secreting  illegal and tax evaded money. The  Union  Finance Minister says that the legalities prevent the Government from disclosing the details of  black money held abroad by the Indians. The interim recommendations of BJP Task Force 2009 have estimated the amount of black money to be between $500 billion to $1,400 billion, according to the Finance Minister. But a recent study by Global Financial Integrity has estimated the present value of illicit money outflow to be $462 billion.

Union Finance Minister says  "All these estimates are based on various unverifiable assumptions and approximations. Government has been seized of the matter and has constituted a multidisciplinary committee to get studies conducted, to estimate the quantum of illicit fund generated by Indian citizens.Legalities come in the way of detecting and recovering black money."

India is a sovereign Republic and  its Parliament is supreme. Legalities coming in the way of getting black  money are framed into the laws by the Government. It is upto it to  excise such laws which hinder the objective of  unearthing and getting black money back.     

In the first place, it should ask itself as to why a legal frame work be provided to the crooks and thieves to get away.  

It is no secret that no deal worth its name, whether of  the land or  other  property is complete without a substantial component of  the black money. Being the current President of a  Cooperative Housing  Society, principally meant for the Members of the Parliament, Ministers and    Governors, including  a Former Prime Minister, the selling price for a four bed room flat is over 2.20 crores, as any property dealer in Dwarka will tell you. But the sale deeds are registered not even at 25% of the value, as per the Registered Deeds submitted to the Society office.

In my rough estimation, on the conservative side, at least Rs. 10,000 crores is generated daily as black money all over the country.

The Revenue Department has the power to acquire such undervalued property. But the procedure being so cumbersome and laborious,  it has been used in rare cases. So not only this state of affairs leads to the generation of the black money, but also deprives the Government of the revenue. Obviously, one factor is the lack of coordination between the Sale Deed or the Power of  Attorney  holders  registering authority along with the other wings of the Government.  Probably, there is more black money in our country than in  all tax heavens put together.  More than that,  though all political parties urge  that the black money be brought  back from Tax Heavens, nobody has demanded that Government should take steps to end its further generation.

Nearly 80,000  to 90,000 people travel to Switzerland every year, 25,000 of them  very frequently. Clearly they would not be travelling for bona fide   tourist purpose, but for some other 'substantial' reasons. The Finance Minister admitted that the  Government has detected undisclosed income of about Rs. 15,000 crore in last 18 months. During the same period, Directorate of International Taxation has collected taxes of Rs. 34,601 crore. The Directorate of Transfer Pricing has detected mispricing of Rs. 33,784 crore, which has prevented shifting of an equivalent amount of money outside India.  

The Supreme Court  has said  more than once in unequivocal terms that more be done to repatriate funds illegally parked overseas, that is a national plunder.

Money stashed abroad is not always the tax evaded money. Drug lords, gun runners,  terrorists groups, gangsters all over the world, along with International Syndicates also keep their money in safe heavens, where they can lay their hands on it, in times of need for their operational purposes. There is no mechanism with the Government to determine and say with cent per cent surety that the money hoarded  abroad is only tax evaded money and not the  other crime linked cash. The Revenue Department and other agencies of the Government like the RAW and State Trading Organisations  have their offices abroad. There is no common mandate to them to report any suspicious transactions  by the Indians  either visiting or staying abroad.

The stark truth is that the black money is the result of high level corruption prevailing in our country. The schemes meant for the poor,  even as per the Government reports, are  not implemented and the money siphoned off.   Even laws permit every  criminal whether in jail or on bail  to hide their names and crimes and  create false alibis. But here the Government is creating alibis for those people whose names have been received as the persons who are having illegally salted away cash in tax heavens.

Even Apex court says that nothing moves without bribery in India.

The Department had the names of account holders in Liechtenstein 's LGT Bank as well as information given by German banks. Incidentally, there are  only 15 banks in Liechtenstein, of which seven are Swiss. The principality with an area of about 160 sq km, is surrounded by Switzerland and Austria and has a total population of 67,000 people. A good sleuth even on a  tourist visa can spot Indians  roaming about and visiting 15 Banks. The rest of the job of tracing the flight of black money from India can be done locally, provided the Government has the will.  So far the Government has been making excuses, some tenable and some untenable. Unfortunately, no Government irrespective of the party in power has made even a pretence of stopping the generation and flight of black money from India, forget about getting the black money back. Thanks to the prodding of the Supreme Court, the Government has started or at least shown motions of acting in retrieving the Indian money stashed abroad.

However, it must remember that pretension almost always overdoes the original and hence exposes itself.

 
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