Mukesh Ambani's family in alleged black money net

The queries, sent in November, were mainly about Capital Investment Trust, which the I-T department said, was used for the purpose of transferring foreign funds comprising GDRs of the value of $400 million to two Indian entities - Reliance Utilities & Power and Reliance Port & Terminal, owned by the Ambani family.

A show-cause notice issued on March 29 to Ambani’s wife Nita, and their three children.

The income-tax department has sought detailed information from its counterparts in seven countries in connection with an on-going investigation against members of Mukesh Ambani's family under provisions of the Black Money Act, 2015, for alleged undisclosed foreign income and assets.

The seven countries are the US, the UK, Switzerland, St. Lucia, Mauritius, Luxembourg and Belgium.

The queries, sent in November, were mainly about Capital Investment Trust, which the I-T department said, was used for the purpose of transferring foreign funds comprising global depository receipts (GDRs) of the value of $400 million to two Indian entities - Reliance Utilities & Power (RUPL) and Reliance Port & Terminal (RPTL), owned by the Ambani family.

The information was sought in the prescribed format of "reporting under exchange of information" under tax treaties.

The queries were sent from the office of the Principal Commissioner (income-tax), Mumbai-3, to the joint secretary (foreign tax and tax research) of the Central Board of Direct Taxes (CBDT).

The CBDT division sent them to seven nations under the tax treaties.

In an emailed response to a Business Standard questionnaire, a Reliance Industries spokesperson said, “We once again strongly deny any suggestion that any member of Mukesh Ambani family had or has any undisclosed foreign income or asset and that they failed to disclose.

"The query sent to us is baseless and has been sent only with malicious intent.

"We reserve our rights to take action as legally advised…”

The move follows the show-cause notice issued on March 29 to Ambani’s wife Nita, and their three children.

In its queries to its foreign counterparts, the I-T department said that the taxpayers had failed to disclose details of Capital Investment Trust, whose underlying company is Infrastructure Company Ltd (ICL) based at Cayman Islands.

Further, they failed to provide details of the assets of the company of which they were the beneficial owners, through various foreign and domestic entities, the department said.

“Being the beneficial owner of the trust, they are liable to pay tax in respect of their undisclosed foreign income and assets or any other sum of money under the provision of the Black Money Act.

"In order to access the correct amount of tax evasion since the issue of GDRs in 2002, it is necessary to know complete details of all entities involved in the whole transaction,” the department said in its request to the US.

According to the I-T department, the Ambani family refuted all the charges in the show-cause notice and submitted the copy of GDR offer documents on June 7 for RUPL along with other documents.

To verify all the submissions made by the taxpayers, the tax department has asked all the countries to furnish specific but exhaustive details such as copy of deposit agreements between RUPL, RPTL and the Bank of New York since November 15, 2002, related to the issue of GDRs in both the firms; details of rights, interests and other securities, property and cash deposited with ICICI Limited that are attributable to GDRs and related shares of both RUPL and RPTL; and complete details of all holders of GDRs of both RUPL and RPTL.

Some of the other queries that went to countries such as the UK, asked for copy of KYC for opening bank accounts, portfolio accounts, structured products, fiduciary deposits, advances, and so on.

Financial details of National Industries or its owner Chimanlal Jivandas Damani from 2002 have been sought.

The department has also provided background about the trust which, it said, was incorporated in 2003 with Damani as its settlor.

It owned an entity named Thames Global, which, in turn owned BVI-based ICL and Antalis Management.

Thereafter, $400 million was brought into ICL through BVI-based Tocan Asset Trading, owned by Damani.

ICL later invested the same amount towards the purchase of GDRs of RPTL and RUPL, the note said.

Later, in 2007, the same equity shares were transferred to Shangrila Investments and Trading and Vicraze Investments and Trading by ITF, Mauritius.

The said equity shares were transferred to Reliance Utilities (RUL), now EWPL Holding, in 2001.

The investment division of RUL was then demerged with Reliance Industries Holding (RIHPL) in 2012 whose ownership vests with Harinarayan Enterprise, a private trust, in which members of Mukesh Ambani family are beneficiaries, the department’s note said.