A little-known businessman from Ahmedabad, Mahesh Shah (67), who declared Rs. 13,860 crore under the Centre’s Income Disclosure Scheme (IDS), has disappeared after Income Tax raids on his premises and those of his chartered accountant.
The businessman, who was accompanied by his accountant Tehmul Sethna, told the I-T authorities that he had Rs. 13,860 crore in cash lying at several places in Gujarat and elsewhere.
The IDS scheme closed on September 30.
45 per cent tax
On the disclosed money, he was supposed to pay 45 per cent tax, which comes to Rs. 6,237 crore, and his remaining money would be declared white and accounted for. According to Mr. Sethna, Mr. Shah “deals with high-end realty and land deals in Ahmedabad, Mumbai and other places.”
As part of the IDS, Mr. Shah was supposed to pay the first instalment of Rs. 1,560 crore to the I-T department by November 30. Mysteriously on November 28, the I-T department cancelled his “form No. 2” to make the payment.
“The search was primary for the IDS, as a client had made a disclosure of Rs. 13,860 crore cash and as per the IDS, he had to pay Rs. 1,560 crore being 25 per cent of the total 45 per cent tax on the entire amount as first instalment,” said a statement issued by Mr. Sethna’s CA firm Appaji Amin.
Mr. Sethna told the media, “I know Mr. Shah since 2013 and accompanied him when he went to make the disclosure.”
However, when asked how he could trust Mr. Shah’s claim of having Rs. 13,860 crore in cash, Mr. Sethna said, “I knew that he used to do high-value deals and I had no reason to doubt his claim. He is also connected with important persons.”
Meanwhile, the I-T searches at Mr. Shah’s residence has reportedly not yielded any significant amount of cash except some documents related to land deals.
Mr. Shah lives with his family in a modest apartment in Satellite area of Ahmedabad and his accountant told the media that the old man used to come to his office riding an auto. In Ahmedabad’s realty circles, Mr. Shah was not known for any big deals but he was “fairly connected with some politicians,” as per the insiders in the realty and construction industry in the city.
On October 1, Union Finance Minister Arun Jaitley had announced that the Central Board of Direct Taxes (CBDT) had received total disclosures of Rs. 65,250 crore under the Income Disclosure Scheme, 2016 in the form of cash and other assets.
The scheme had provided a one-time opportunity to black money holders who had not paid full taxes in the past to come clean by declaring their domestic undisclosed income and assets by paying tax plus penalty at the rate of 45 per cent.
