The income tax department has moved court under the Black Money Act against Sonia Mehta, the wife of Jatin Mehta who is the promoter of Winsome Diamonds and Jewellery Ltd, for not disclosing immovable foreign assets of $210 million, or Rs 1,450 crore, sources told The Indian Express.
Winsome Diamonds is the country’s second largest wilful defaulter, and owes Rs 4,687 crore to a consortium of banks headed by Standard Chartered Bank. Its associate firm Forever Precious Diamonds and Jewellery owes another Rs 2,121.8 crore to a set of banks led by Punjab National Bank. The company was classified as a “wilful defaulter” in 2013.
The department has also separately moved against Sonia and Jatin Mehta for alleged tax evasion of Rs 21 crore, according to filings with a special court in Mumbai. The tax department filed three petitions in a lower court against the Mehtas on May 25.
The department has charged Sonia under sections 276 (concealment or transfer of property to avoid tax recovery) and 277 (making a false statement in verification) of the Income Tax Act, and section 50 of the black money law, which deals with failure to furnish information about assets, including financial interests in any entity, abroad.
It has also filed for prosecution against Jatin under section 278 of the tax law, which mandates punishment for a second or subsequent offence.
Speaking to The Indian Express over phone, Jatin Mehta said: “My wife has been a Non-Resident Indian since 2003, so where is the question of any tax default?”
The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, was brought by the government in 2015 as part of its drive against black money and to prosecute those Indians who have secretly stashed illicit wealth abroad.
The Indian Express had first reported in June 2016 that Jatin and Sonia gave up Indian citizenship in 2013-14 and became citizens of St Kitts and Nevis, a dual-island Caribbean nation known to be a popular tax haven.
Sonia’s name also figures in a series of lists tied to offshore entities linked to Indians — Swiss Leaks, Panama Papers, Paradise Papers — investigated by The Indian Express in association with the International Consortium of Investigative Journalists (ICIJ).
Sonia is the director and shareholder of a British Virgin Island firm Tuscan Sun Corporation since April 2016. Her registered address is shown as a suite in Dubai.
Winsome Diamonds and its associate firms have come under the scanner of multiple agencies including the CBI and Enforcement Directorate (ED) for the alleged Rs 7,000-crore bank fraud.
The CBI has filed a chargesheet against Winsome, Jatin Mehta and 21 others including senior public sector bank officials. The ED has attached properties worth Rs 172 crore of Winsome and its subsidiaries under the Prevention of Money Laundering Act (PMLA), and is planning to file its prosecution complaint against the diamond firm this week.
According to the CBI, Mehta used seven of his companies to obtain letters of credit from Punjab National Bank, Vijaya Bank and Central Bank of India to purchase gold. A standby letter of credit is a guarantee given by a bank on behalf of the client that it will fulfill a contractual commitment with a third party in case of a payment default.
Among other charges, the CBI alleged that gold was imported and allegedly re-exported to 13 UAE-based companies.