New Delhi The Income Tax (IT) probing businessman Ashok Mittal has made a sensational disclosure in the Delhi High Court, alleging he owns foreign undisclosed wealth to the tune of Rs 450 crores, and also that in partnership with NandKishore Chaturvedi, a wanted hawala dealer, invested Rs 50 crores of black money in the hotel Royal Plaza in 2003. He is flight risk and could become a fugitive like his business partner, NandKishore Chaturvedi, a notorious hawala dealer, IT claimed, opposing quashing of his LOC (Look Out Circular).
In an affidavit submitted to the high court on December 5, 2023, the IT department provided 28-page details of Ashok Mittal’s undisclosed foreign assets while contesting his plea to quash his LOC (Look Out Circular). The department had opened an LOC against him on July 17, 2022, after raiding his property, including Hotel Plaza, on July 7, 2022.
Sunil Kumar Singh, Principal Director of Income Tax, claimed that their probe is in a crucial stage and that if Ashok is allowed to fly abroad, he could easily tamper with evidence, which would hamper India’s fight against economic offenders under the back money laws. He also clarified that Ashok has made incorrect conjectures that the LOC was opened on a charge of tax evasion. “The Respondent (IT Department) told the court on November 22, 2023, that the Petitioner (Ashok Mittal) had based his whole case for quashing the Look Out Circular (“LOC”) on the completely wrong assumption that the LOC was opened in his case because he didn’t report his foreign income and assets in his Income Tax Return (“ITR”) for the years 2015-16 to 2018-19, “thereby trying to mislead this Hon’ble Court,” the affidavit said. “The quantum of such undisclosed foreign assets and income already available with the departments from the search and post-search proceedings amounts to more than Rs 450 crore. This incriminating material found not only relates to the period AY 2015-16 to AY 2018-19 but also to the years 2003 onwards. Therefore, the claim of the petitioner (Ashok Mittal) that the only reason for the issuance of the LOC is the non-disclosure of foreign income and assets during the years 2015–16 to 2018–19 is misleading,” it added.
“The evidence gathered during search and seizure operations reveals huge undisclosed foreign income and assets in the hands of the petitioner, and the petitioner (Ashok Mittal) is also liable to prosecution under Sections 50 and 51 of the Black Money (Undisclosed Foreign Income and Assets) Imposition of Tax Act 2015 (“Black Money Act”) for cognizable offences having punishment up to 7 and 10 years,” calimed the IT department.
The department further disclosed an almost two-decade-old close partnership between Ashok Mittal and NandKishore Chaturvedi, a notorious hawala dealer presently wanted by the Enforcement Directorate (ED) and IT. “The nature of operations uncovered during the search operations also revealed the petitioner’s (Ashok Mittal) constant involvement with one Nand Kishore Chaturvedi, who is a hawala operator and currently a fugitive. Nand Kishore Chaturvedi and his brother Vivekanand Chaturvedi have been close associates of the petitioner, the power of attorney holder in the petitioner’s (Ashok Mittal) Mauritian and BVI-based entities, and his auditors for more than 15 years, as per the material seized during the search operations,” IT alleged.
Detailing the reasons why IT is apprehensive of Ashok’s foreign travels, it said: “The respondent submits that its investigation is at a very crucial stage and that the department is trying to obtain further information from the foreign tax authorities relating to the undisclosed foreign assets and income of the petitioner. The respondent has already made FT and TR (Foreign Trade and Tax Research) references to the concerned authorities of all four countries—Dubai, Malaysia, BVI, and Mauritius—and is awaiting their responses.” Based on the above facts and circumstances and what was found during the search and seizure operations, the LOC was opened in the petitioner’s case because there is a very good chance that the petitioner, if allowed to travel abroad, will try to tamper with the evidence that the respondent is trying to get from the foreign tax authorities. This will clearly be against India’s economic interests, as it is undisclosed.
According to IT, there is also evidence that Ashok Mittal and NandKishore Chaturvedi invested their black money in Hotel Royal Plaza through their Malasyian-based company Hillcrest in 2003. “As per the seized material during the search proceedings and the statements taken, Petitioner (Ashok Mittal) is involved in round tripping of funds amounting to INR 50 Cr. (USD 6 million) from Swiss Citi Bank Accounts of Petitioner’s son through multiple shell companies in Malaysia (through entities named Cardiff Ltd. and Hillcrest Realty SDN BHD) owned by the Petitioner in the garb of loans from another British Virgin Island (BVI) entity, Bamberg Management Inc., which was incorporated 6 months after the funds were first remitted (which were ultimately not re-paid and those shell entities were even dissolved for this reason). Actually, the amounts were reassigned as loans from the BVI entity Bamberg in 2009 by backdated redrawing of books for the period 2003–2008.,” IT alleged. “To complicate the structure, the name of a dummy person (Mr. Harish Premjee) was used to claim that he had a beneficial interest in the BVI entity Bamberg, who became a shareholder in the entity only in June 2013—10 years after the funds were transferred. Thereafter, the said amount of INR 50 crore was routed to India to the petitioner’s Indian company, i.e., Hotel Queen Road Pvt. Ltd., by way of investment in preference shares through the Malaysian entity Hillcrest Realty, which is the largest shareholder in the petitioner’s company, Hotel Queen Road Pvt. Ltd,” it added.
Further elaborating on the fraud, the IT revealed that the Indian company then paid dividends to the Malaysian entity Hillcrest Realty, which, in turn, instead of transferring the dividends to its parent BVI company Bamberg, transferred those dividend funds to the shareholders of Bamberg. These shareholders (Mr. Pradeep Chandra and Mr. Ramesh Kumar Rajpal) of the BVI entity Bamberg are close associates of the petitioner who were also involved with him in his Dubai operations. Unsigned wills were obtained for both Mr. Pradeep Chandra and Mr. Ramesh Kumar Rajpal, where they vested all benefits arising from Bamberg Management Inc. (BVI entity) and Mis Danube Trading FZC (Dubai entity) for the petitioner. When these two people became shareholders of the BVI entity in 2017, all of these events occurred at once. Around the same time, the Indian company distributed dividends to the Malaysian entity, which then transferred the dividend to the personal accounts of these people (the BVI entity’s shareholders). Additionally, around the same time, these people drafted the unsigned wills that assigned the petitioner all of the benefits from the BVI entity. Therefore, the purpose of the entire arrangement is to conceal the origin of the INR 50 crore in funds that the petitioner owns and has sent back to India through fictitious foreign entities. The Department has documents as to the civil suit filed by the petitioner in Malaysia against his brother Ram Parshottam Mittal and the entity (the services of which were taken for incorporating shell companies), claiming that the entire INR 50 crore in Malaysia was arranged by the petitioner himself. “The Department has documentary proof from Postcullis Trustnet (which assisted Petitioner in incorporating and managing shell companies in Malaysia) that Petitioner’s Malaysian entity, Hillcrest Realty, has given Power of Attorney to Mr. Nand Kishore Chaturved, who is a Hawala operator and is currently a wanted fugitive in India, by the Enforcement Directorate and the Respondent (IT) itself,” IT alleged.