India's efforts to crackdown on black money stashed abroad today got a major boost with Switzerland readying a list of Indians suspected to have un-taxed money in Swiss banks, while Special Investigation Team constituted by Indian government promised action if any illegality is found.
The names of certain Indian individuals and entities came under the scanner of the Swiss authorities during an ongoing exercise to identify the real beneficiary owners of funds held in various banks operating in Switzerland, a senior Swiss government official told PTI.
The list of such persons and entities is being shared with India, while further details would also be provided in due course and all necessary administrative assistance would be made available as well, he said.
Reacting to the development, Justice M B Shah, who is heading the SIT on black money in India, said that the list would be verified and action would be taken against those found to have kept unaccountable money.
The Swiss government official refused to divulge the identity of the concerned entities as also the quantum of funds involved, citing the confidentiality clause of the information exchange framework between India and Switzerland.
He, however, said that they are suspected to have held untaxed money in Swiss banks through structures like trusts, domiciliary companies and other legal entities based out of countries other than India.
The Indian link of these entities came to the fore after enquiries by the banks and regulatory authorities about the source of the funds and the beneficiary ownership of such accounts.
The development comes at a time when the official data published by Switzerland's central bank, SNB, has shown that Indian money in various Swiss banks rose by 43 per cent during 2013 to close to Rs 14,000 crore, while including the money held directly by Indian clients and those through fiduciaries or wealth managers.
The Swiss official said that these funds might not necessarily be illicit funds as these clients have themselves declared to be Indians.
He also dismissed claims about Indians having trillions of dollars of black money in Swiss banks, saying that the total size of foreign money from across the world in all 283 banks operating in Switzerland stands at just about USD 1.6 trillion.
Justice Shah also said that "it is not a list of only black money. It is a list of those persons who are also legally vested. It is a combined list. We are asking for the list of the said persons. Then we will verify. Then action is taken."
"If it is legal we cannot do anything, If it is illegal or unaccounted money then we take action. It depends on which manner the amount is deposited," he added.
The Swiss government official also said that Switzerland is looking forward to working with the new government in India and it will also extend all possible support to the SIT on black money.
Senior advocate Ram Jethmalani, who has been a petitioner in Supreme Court in the black money case, said from London, "I am very happy and feeling relaxed today and I am hopeful that the NDA government will take the fullest possible advantage of this information.
"So much of wealth is stolen from India and they will be punished. The money will be used to eradicate poverty and all other ills of the society."
AAP leader and senior lawyer Prashant Bhushan said that SIT was formed on the orders of the Supreme Court, so government need not take credit for this.
"And if Swiss government will share any formation that is a welcome step. But government must stop illicit flow of money into such instruments such as p-notes and the money into the companies which are registered in tax havens," he told reporters in Delhi.
While declining to be named, as he is not authorised to speak to media, the Swiss official further said the details are being shared with India on a 'spontaneous' basis and are different from the information sought earlier by the Indian authorities on the basis of 'leaked' or 'stolen' lists of certain banks, including the so-called 'HSBC list'.
Swiss government has been refusing to share details about the Indians named in this 'HSBC list', which was stolen by a bank employee and later found its way to tax authorities in various countries including India.
Despite repeated requests from India, Switzerland has said its local laws prohibit administrative assistance in matters where information has been sourced illegally, including through stolen lists.
The said 'HSBC list' allegedly contains names of Indians and other foreign nationals having ill-gotten wealth in Swiss unit of the global banking major.
India is one of the 36 countries with which Switzerland has signed treaties to provide administrative assistance in tax matters in accordance with international standards.
In its latest annual report on 'international financial and tax matters 2014', the Switzerland's Federal Department of Finance has committed itself to compliance with international standards in the area of tax administrative assistance.
Switzerland has also agreed to cooperate actively on the development of a global standard for automatic exchange of information to ensure the tax compliance of foreign asset management clients, while putting in place a robust regulatory system for identifying the beneficial owners of all types of legal entity, including trusts and domiciliary companies.
A new framework has also been put in place for exchange of information on request and spontaneous exchange of information in a much more effective manner, while work is underway to enable administrative assistance for previously committed tax crimes within the last three years.
Switzerland's tax treaty with India also provides for "exchange of information in tax matters to the widest possible extent without allowing the contracting states to engage in fishing expeditions or to request information that is unlikely to be relevant to the tax affairs of a given taxpayer".
The Swiss regulations also state that "the details to be supplied in the administrative assistance request are important procedural requirements to ensure that fishing expeditions do not occur, but they must not be interpreted in such a way that they frustrate effective exchange of information".
Swiss government has said that it would honour administrative assistance requests, if the requesting country identifies the taxpayer, "although this identification can ensue in a way other than by indicating the name and address".
The requesting country would also need to indicate the name and address of the alleged holder of the information, such as banks, if such information is known to it.
In the case of missing data on the information holder, Switzerland will provide administrative assistance if "requests are in line with the principles of proportionality and practicability in accordance with internationally applicable standards".
In Delhi, BJP spokesperson Siddharth Nath Singh said, "...it just shows the Narendra Modi government took a brave decision to form SIT which was pending since 2011. And in our first cabinet meeting we decided to form the SIT."