Lok Sabha Question No. 1077 (UNSTARRED), answered on 2016-04-29
Subject: Investigation of Offshore Accounts
Ministry: FINANCE
Asked by: KULAMANI SAMAL, VINOD KUMAR BOIANAPALLI, SUKENDER REDDY GUTHA, M. UDHAYAKUMAR, PREM DAS RAI, HARISH CHANDRA MEENA, RAJ KUMAR SINGH, KIRIT SOMAIYA, MUTHAMSETTI SRINIVASA RAO (AVNTHI), BALASUBRAMANIAM SENGUTTUVAN, CHANDU LAL SAHU, MAJ. GEN. (RETD) BHUWAN CHANDRA KHANDURI AVSM, RAKESH SINGH

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE

## LOK SABHA UNSTARRED QUESTION No.1077

APRIL, 2016

TO BE ANSWERED ON FRIDAY, THE 29 TH

VAISAKHA 9, 1938 (SAKA)

## INVESTIGATION OF OFFSHORE ACCOUNTS

1077. DR. KULAMANI SAMAL: SHRI B. VINOD KUMAR: SHRI GUTHA SUKENDER REDDY: ADV. M. UDHAYAKUMAR: SHRI PREM DAS RAI: SHRI HARISH MEENA: SHRI R.K. SINGH: DR. KIRIT SOMAIYA: SHRI MUTHAMSETTI SRINIVASA RAO (AVANTHI): SHRI B. SENGUTTUVAN: SHRI CHANDU LAL SAHU: MAJ GEN B C KHANDURI AVSM (Retd): SHRI RAKESH SINGH:

Will the Minister of FINANCE be pleased to state:

- (a) the modalities by which black/ unaccounted money is taken out of the country;
- (b) whether the Government has taken note of the alleged information made public by the  'Panama  Papers',  if  so,  the  details  thereof  along  with  the  steps  taken  by  the Government to ascertain authenticity of these papers;
- (c) whether any team/agency/body to investigate suspected tax evasion by individuals named in the  Panama  Papers Leak  case has  been  set  up  by  the  Government,  if  so,  the details thereof;
- (d) the findings of such team; and
- (e) the action taken or proposed to be taken on the findings?

## ANSWER

## MINISTER OF STATE FOR FINANCE

(SHRI JAYANT SINHA)

- (a) The Government has come across instances of transferring money out of the country illegally. Some of such cases detected indicate use of the medium of trade for such transfers which  include overvaluation in imports, undervaluation in exports, remitting foreign exchange on the strength of forged import documents, payments/remittances for non-genuine purchases of goods/services/technical know-how, etc.

(b) Recently, information about certain offshore entities held by various Indian persons has appeared in media. Such information is attributed to be part of 'Panama Papers' leaks. The  International  Consortium  of  Investigative  Journalists  (ICIJ),  a  Washington  based organization which has reportedly made the revelations pertaining to the Panama Papers, has put a caveat on its website (www.icij.org) by mentioning that it should not be assumed that everyone who appears in the Panama Papers is involved in tax avoidance or evasion and there are  legitimate  reasons  to  create  a  company  in  an  offshore  jurisdiction  and  many  people declare  them  to  their  tax  authorities  when  that  is  required.  The  Government  has  taken necessary measures for expeditious investigation in such cases including through enhanced international cooperation.

(c) to (e) The Government has constituted a Multi-Agency Group on 4 th April 2016, inter alia, for facilitating co-ordinated and speedy investigation in the cases of Indian persons allegedly having undisclosed foreign assets and whose names are reportedly included in Panama Papers leaks. The Group consists of the officers of Investigation Division of the Central Board of Direct  Taxes  (CBDT),  Foreign  Tax  &  Tax  Research  Division  of  CBDT,  Enforcement Directorate  (ED),  Financial  Intelligence  Unit  (FIU)  and  Reserve  Bank  of  India,  and  its Convener is Member (Investigation), CBDT. It has been asked to report the progress in such cases on regular basis. Investigation in such cases is at preliminary stage. Further course of action depends upon outcome of the investigation in respective cases.

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