Black money: Tax sleuths combing HSBC Mumbai

hsbcmumbaiMUMBAI: The Income-Tax (I-T) department has started what it calls an extensive survey of HSBC headquarters in Mumbai. Since Friday afternoon around 20 sleuths have been involved in the operation and it’s likely to go on till Sunday evening.

I-T sleuths are not calling it a raid for technical reasons.

What triggered the survey was a suspected collusion between the Indian branch of HSBC and its Swiss counterpart in helping Indians stash away black money abroad and evade tax.

Right now, the department is seeking documents and transaction details of several account holders.

Several officials, including HSBC general manager and country head Naina Lal Kidwai, are likely to be questioned in the coming days.

A spokesman of HSBC India declined comment.

Only three days ago, the Swiss police had searched HSBC’s Geneva unit as part of a money-laundering probe.

“It is alleged that representatives of HSBC India, which has employees based in the US, assured customers that details of their accounts would not be reported to tax officials. Also, bank officials are allegedly advising them on tax evasion,” I-T sources said.

HSBC, one of the leading foreign banks with large operations in India, is in the eye of a storm after two separate lists, leaked by whistleblowers, featured 1,668 Indians holding secret accounts in the bank.

The survey is being conducted under Section 133 (a) of the I-T Act, 1961. Under this Act, the department can compel banks and other authorities to furnish information on a pending proceeding or inquiry.

The taxmen, sources said, have worked on some major cases figuring in HSBC lists, which they got from France a few years back.

It has also gathered evidence against HSBC Geneva, which seems to have not disclosed client information to law-enforcement agencies, helping clients evade huge amount of tax.

Sources say this could not have happened without the help of Indian counterparts.

According to a former I-T official, an expert in black money cases: “The bank promoted its services on the basis of keeping information secret from tax authorities. This is very common practice by all Swiss banks operating in India.”

Though Switzerland agreed to help India to share information with Indian authorities on alleged cases of black money salted away in Swiss banks, “nothing significant has come out so far,” said a government source.

The probe in the HSBC Geneva cases, with names of 628 entities, gathered momentum recently as a number of cases under this category are getting time-barred by the end of this financial year.

The Special Investigation Team (SIT) on black money has to submit its report to the Supreme Court by March 31.

The SIT has also widened its probe into the cases after the second list from HSBC Geneva was leaked.

The list features names of 1,668 Indians while the number of actionable cases stands at 1,195 after taking into account duplication and other factors. Collectively, these accounts had a balance of Rs 25,420 crore till 2007.

In the list published recently, there are 2,699 accounts linked to 1,688 Indians. Of these, 1,403 accounts were opened between 1969 and 2006 while the maximum amount of money associated with a client connected to India was US$876.3 million.

Earlier, India had received from France a list of over 628 Indians with accounts in HSBC’s Geneva branch.

What is an I-T survey?

A I-T survey can only take place within the office premises of an individual or company. Once commenced, a survey can continue up to mid-night and even the next day.

During the course of the survey, I-T officials can impound the documents and book of accounts from the premises. The survey team can put identification marks on the impounded docs and give copies to assesses as soon as the survey is over.

A survey can lead to seizure. – From

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