The Enforcement Directorate's summons to Raninder Singh, son of former Punjab Chief Minister Captain Amarinder Singh who is the Congress' chief ministerial candidate for the next election to the state assembly, has triggered a political war.
- ED had summoned Mr Singh's son over alleged undisclosed foreign assets
- Mr Singh is Congress' chief ministerial candidate for next year's polls
- ED probe an off shoot of I-T complaint against him: Government sources
Mr Singh says the summons for his son over alleged foreign exchange violations are part of a "political witch-hunt" by Finance Minister Arun Jaitley.
"The Finance Minister is using the Income Tax department and the Enforcement Directorate (ED) to issue summons to my family members. Not that it matters to us. We will come clean no matter the extent to which they go. But this is being done deliberately ahead of the elections," he said.
The government, in response, has launched a counter attack claiming that the ED investigation is an off shoot of a complaint against Raninder by the Income Tax department and is not a new case.
Sources in the government say Raninder has already been summoned by a Ludhiana court on July 26. "The charge in the complaint is that he falsified facts to the income tax department about financial transactions through off-shore companies and a trust registered in the British Virgin Islands (BVI)."
Countering Mr Singh's charge, sources in the government say, "The issue has its origin in information received about HSBC cases from France in June 2011 indicating accounts of various Indians in offshore branches of the bank."
The information was reportedly sent to the investigation division of the Central Board of Direct Taxes ( CBDT ) for further probe in July 2011. "It was not the NDA that ruled Delhi then but the UPA government," source said.
Case file shows after information about HSBC accounts was received from France in June 2011 under the Double Taxation Avoidance Clause (DTAC), the case was handed over to the Foreign Tax and Treaty Regulation Division of the CBDT, and then the investigation division of the CBDT in July 2011. For further information, Switzerland and UAE were approached in January 2012.
Documents attached to the IT department's complaint triggered by the probe in the HSBC case in the Ludhiana court against Raninder Singh claim that an off shore company linked to him bought a house in London's Knightsbridge for £ 1.8 million.
The document in Ludhiana court, according to sources, was received by the IT department from a "foreign competent authority", suggesting it was sent via official channels.
This document in court shows that a settlement was executed purportedly between Raninder Singh as settler and HSBC trust company BVI Limited as the trustee in respect of the Jacaranda Trust on July 22 2015.
Sources say according to the deed, the beneficiaries of the trust are the settler (Raninder Singh himself), his parents, children and others (who may be included by the trustees).
The same document also revealed that the trust was the beneficial owner associated with the following British Virgin Islands based entities, with balance in their accounts as follows:
a) Chillingham Holding Ltd - $ 183151.04 as on Feb 2007
b) All Worth Venture Holdings Ltd $ 5986943.73 as on Feb 2007
c) Limerlock International Ltd - 1878.67 - Nov 2006
d) Mulwala Holdings Ltd
The document further shows that Mulwala Holdings Ltd acquired by the Jacaranda Trust through HSBC trust company had in its corporate decision proposal mentioned that the original request to transfer the property unit "P 29, Marina Mansions" to Ferx Asset Et Holdings Ltd in Dubai was received from Amarinder Singh, a discretionary beneficiary of the trust.
An ED official said, "It is on the basis of these findings that summons were issued on June 1, 2016." Amount of undisclosed foreign asset detected prima facie stand at approximately 29 crore.
Investigation documents show that the Jacaranda Trust was set up allegedly by Raninder Singh "in a foreign jurisdiction" on 22 July 2003 with Raninder, his parents and children as the beneficiaries and four foreign companies were beneficially owned by this trust and this information was not disclosed to the income tax department.
Prosecution complaint against Mr Singh's son was filed on March 18 2016 under the Income Tax Act and the IPC in the court of the Chief Judicial Magistrate (CJM) Ludhiana. This court issued summons for July 21, 2016.
Sources say a show cause notice to Preneet Kaur, wife of the former Punjab chief minister, was served after HSBC details were received. Opportunity was given to her thrice to inspect the documents received but she didn't make an appearance. Following this the final show cause wad served.