KERALA

Black money: new law mooted

Court finds IT Act inadequate

KOCHI: A Division Bench of the Kerala High Court on Tuesday observed that since the provisions in the Income Tax Act were inadequate to check the circulation of black money in the country, the government should take serious initiative to enact a legislation for the same.

The Bench comprising Justice C.N. Ramachandran Nair and Justice Harun-Ul-Rashid while hearing an appeal in an income tax assessment case impleaded the Union Finance Secretary as additional respondent. The Secretary was directed to take up the matter with the Reserve Bank of India and convey the decision of the Union government to the court on the suggestion.

Counterfeit currency

The court observed that it was high time that something should be done to arrest generation and distribution of black money. Besides black money, there was massive circulation of counterfeit currency which, of late, was reportedly reaching even from foreign countries. Hawala money was yet another problem faced by the economy. The result was widespread corruption, funding of terror, crime, smuggling, etc. with these money.

Beneficiaries

Though the Income Tax Act provided for various “disincentives and restrictions” such as disallowance of business expenditure incurred in cash above Rs.20,000 other than through account payee cheques and demand drafts, etc. the provisions were more often violated.

If the present trend of circulation of black money and counterfeit notes continued, it was “a matter to be seen how long our currency will retain its worth.”

No civilized society permitted handling of so much of cash as in India. In fact, in the West, transactions were through banking instruments such as credit cards or debit cards or other instruments and only in our country people made payment for everything in cash. Political parties were also beneficiaries of the black money and the recent display of bundles of currency in Parliament established it beyond doubt.

Recommended for you