A former Indian naval officer has been named by the revenue department for allegedly evading income tax on his money transfers routed through an offshore tax haven.
Rear Admiral (Retd) P N Agarwal has been interrogated by the tax officials for evasion of £2.4 million (approximately Rs 24 crore). His residence and offices were also searched by the department for having received the money transfers from a UK-based defence company with the payments routed through the island of Jersey.
The payments were made through the years 2004 through 2009. The tax department received the details from a counterpart agency last year.
Now, more accounts belonging to the officer have been discovered abroad, which are estimated to have more than Rs 60 crore of undisclosed income, said sources. Agarwal has informed the tax authorities that the money transfers were “consultancy fees” paid for by Militair Aviation Ltd.
This company is a UK-based subsidiary of AmSafe Bridport Ltd, which is a major manufacturer of aircraft spare parts and related high precision equipment. It is also a supplier for many of these parts to Hindustan Aeronautics Ltd.
Agarwal, a marine engineer who retired from the Indian Navy in 1991 was made the payments through an account of Royal Bank of Scotland branch based in Jersey. The ownership of the account is in the name of Silver Streak International. The company is a Delhi based handicrafts exporter owned jointly by Agarwal and his son Rajiv. But the tax records of the elder Agarwal show no mention of these transactions.
Agarwal’s family sources said he is suffering from memory loss, a plea he has also taken with the tax department.
His son, Rajiv, told The Indian Express, “It is only when income tax arrived at our house for a raid that I came to know about the Jersey deposits. From what my father told me earlier, the payments were towards consultancy fees paid to him by Militair for setting up a project in India. We are now fully co-operating with the tax authorities”.
In response to an email sent to AmSafe, a spokesperson said, “Many of AmSafe Bridport’s senior executives are in Malaysia at an exhibition at the moment and may not be available for comment/response.”
The account book of Militair too does not reflect the payments made to Silver Streak or to Agarwal.
Details available with The Indian Express for instance show that payments to Agarwal started in April 2004 with £46,780.74. By the end of 2005, the sum had had leapt to £981,657 through 25 tranches.
After the tax raids, Agarwal has paid up approximately Rs 6.5 crore towards his tax dues while the department has seized another Rs 7.5 cr worth fixed deposits during their search operations.
But the Agarwals still owe another Rs 14 crore as tax for the assessment year 2004-05.