Photographer: Dhiraj Singh/Bloomberg

Family’s $29 Billion Fortune Claim Denied Amid India’s Tax Hunt

  • Tax department currently investigating suspicious declaration
  • Fortune would make family richer than billionaire Ambani

India’s government has rejected a $29 billion declaration of income from a family of four citizens. That fortune would’ve made them wealthier than the nation’s richest man.

The Mumbai-based family including the patriarch, his wife, son and sister together declared 2 trillion rupees -- more than Mukesh Ambani’s $21 billion of wealth -- during a government program offering amnesty on undisclosed income, the Ministry of Finance said in a statement on Sunday. Another man from Prime Minister Narendra Modi’s home state of Gujarat revealed 138.6 billion rupees of illegal income, locally known as black money.

“After due inquiry, it was found that these were persons of suspicious nature and very small means and the declarations could have been misused,” according to the statement. The department has since started a probe “to determine the intention behind these false declarations.”

Modi, who is attempting to fulfill his election pledge of unearthing black money, in September offered tax evaders an amnesty in exchange for a one-time levy of 45 percent on their income. That program led to a disclosure of 673.8 billion rupees of illegal income excluding the two cases rejected by the Finance Ministry. While the government didn’t elaborate on why it found the transactions suspicious, analysts said these may be cases where several individuals used the people to launder cash.

"This obviously appears to be a case of money laundering and it’s the right thing on the part of the tax authorities to launch an investigation," said Anil Verma, national coordinator for the New Delhi-based independent governance watchdog Association for Democratic Reforms. "To me this isn’t surprising at all, given the large part that cash plays in our economy from elections to real estate."

Read more on Modi’s latest step to beat tax evaders

Mumbai’s Sayed family gave their address in an affluent Mumbai suburb, but older information with the tax authorities showed three of the four lived in the city of Ajmer, in the Indian state of Rajasthan, and their address had only been changed in September, according to the Finance Ministry’s statement.

Declared Sayed family home, left, and Ambani’s residence the Antilia Tower.

Photographers: Adeel Halim & Siddharth Philip/Bloomberg

The two-story building on a busy shop-lined street in Mumbai looks nothing like the home of what would be one of India’s richest men -- and a far cry from Ambani’s 27-story residence. The Sayed family name doesn’t appear on a board listing 12 flat owners. Stores selling bed linen by Bombay Dyeing & Manufacturing Co. and suitcases from Samsonite International SA flank the ground floor entrance and a Honda City and Ford EcoSport compact SUV were parked in the driveway Monday morning.

‘Drugs, Diamonds or Dawood?’

Mahesh Shah, from Ahmedabad in Gujarat, was questioned by tax officials on Sunday, NDTV reported citing a tax official. Shah had earlier told a local language TV channel that the money wasn’t his and that he disclosed it on behalf of various politicians, bureaucrats and builders for a fee, NDTV reported.

While both Rajasthan and Gujarat are home to populations known for their entrepreneurial spirit and cash-based businesses, they also share a border with India’s arch rival Pakistan. India has long accused terror groups based in Pakistan of using counterfeit or smuggled Indian currency to foment violence across the border.

Several Indian commentators found the 2 trillion-rupee declaration incredulous.

“Wow!!! Drugs, Dawood or diamonds?” tweeted Samir Saran, vice president at the New Delhi-based Observer Research Foundation, referring to Dawood Ibrahim, an Indian mafia boss India accuses Pakistan of harboring. “Or all of the above?”

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