Hasan Ali Khan case may end in a whimper

The high-profile case of alleged tax evasion and money laundering against Pune-based stud farm owner Hasan Ali Khan is turning out to be a damp squib as the government is said to have come to a conclusion that probe agencies do not have enough evidence to nail him on the charge of having stashed away a huge amount of black money abroad.

Adding to the government's problem is the non-cooperation from Swiss authorities on purported details of transactions of some bank accounts of Khan.

The government, as per evidence collected so far, is said to be of the opinion that the material against him is "not tenable" in the court of law, sources said.

The 60-year-old businessman, who is under arrest, came under scrutiny from multiple agencies under the Department of Revenue (DoR) and the Economic Offences Wing of the Mumbai police in 2007 which had been probing him and his associates for various charges of money laundering, income tax evasion and violations of the Passport Act for the last seven years.
Khan was slapped with an Income Tax notice demanding taxes over Rs 50,000 crore, which also seems to be crashing like a pack of cards as there is no credible evidence with the tax authorities to further press their charges and ensure his conviction.

Officials attributed the failure of the case to various factors including non-cooperation from international authorities, small value of available assets and non-availability of fresh evidence against the businessman.

"We have been advised by the government's law department that whatever evidence we have against Khan and his associates till now is not tenable. There is bleak chance of probe agencies getting any more evidence in this case which came to light in 2007," a senior official privy to the case said. 

A team of Enforcement Directorate (ED) and I-T officials has been wanting to meet Swiss banking authorities in this regard since 2012 but there has been no success as officials say their counterparts in the alpine country are not "convinced" about the authenticity of documents possessed by Indian investigators.

"We are demanding from government blacklisting of banks for not sharing information (in this case). We have two demands, first blacklisting of such banks or if not banks then at least the transactions. We had a lot of difficulties, we have no hesitation to mention that the UBS bank, the Union Bank of Switzerland, particularly in Hasan Ali Khan case, they just refused to share any information.... They are not even prepared to share with us the name of the officials.

"They (Swiss) said you have to obtain it from our headquarters and the headquarters in Switzerland told us to come through the LR (judicial requests)," Special Director of the ED Balesh Kumar said during an event here today.

Khan is currently in jail after the ED slapped a money laundering case against him in 2011. It was claimed to be the biggest individual case of black money stashed abroad and also that of the highest tax evasion by an individual in the country.

While the I-T department raised a tax arrear demand of Rs 50,345.73 crore on Khan, the ED registered a case under the Prevention of Money Laundering Act (PMLA) for allegedly stashing away USD eight billion of unaccounted money in foreign banks. It is also probing him for alleged forex violations.

A trial in this case, for money laundering offences, is pending in a Mumbai court since 2011.

Last year, on the request of the DoR for a legal opinion to proceed in the case against Khan, Attorney General G E Vahanvati had held that he did not find any material in the file referred to him suggesting such abetment or inducement on part of the officials of UBS.

He had also cautioned investigating agencies that any decision to launch prosecution must only be taken after enough material is gathered that prima facie suggests abetment or inducement by officials of the bank. 

Vahanvati had said that to prove that bank officials were not telling the truth and it was intended to help Khan evade tax, the tax authorities here should have enough evidence to proceed.
In 2012, the Finance Ministry had informed Parliament's Public Accounts Committee (PAC) that recovery of tax arrears from Khan is not possible despite attaching his known movable and immovable assets.

The DoR had said that as per existing guidelines, recovery through sale of attached properties can be made only after the decision of appeal filed before the Income Tax Appellate Tribunal.
Khan, his associate Kashinath Tapuriah and eight others have been named in the "top ten individual defaulters" for Income Tax assessment year 2009-10.

Tapuriah owes government Rs 602.80 crore in taxes. Late Harshad Mehta (12,719.14 cr), A D Narrotam (Rs 5,781.86 cr), Hiten P Dalal (Rs 4,200.04 cr), Jyoti H Mehta (Rs 1,739.57 cr), Ashwin S Mehta (Rs 1,595.51 cr), B C Dalal (1,535.89 cr), S Ramaswamy (Rs 1,122.48 cr) and Uday M Acharya (Rs 683.22 cr) are also mentioned in the list released by the Finance Ministry in 2011.

A huge interest on this amount too has been adding up over the years.