Anil Ambani did not disclose foreign assets worth Rs 800 crore. What now?

When was the last time you heard about Anil Ambani? It was probably in 2021 when his name was leaked in the Pandora papers. Also. you might remember when he declared himself an 'insolvent' in a UK court in 2020. 

Well, here's an update: the income-tax department passed a final order in March 2022 under the Black Money Act 2015, and found Anil Ambani's hidden wealth (undeclared assets and investments) worth Rs 800 crore. The investigation wing of the I-T department found multiple offshore entities and transactions in various bank accounts that all link to Ambani.

WHAT DID THE INCOME TAX OFFICE FIND? 

1.  Ambani is the beneficial owner of entities present in two offshore havens. First, the Bahamas, and second, the British Virgin Islands. 
2. In the Bahamas, he set up a trust called the Diamond Trust in 2006 with another offshore company called Dreamwork Holdings Inc. This company has set up a Swiss Bank account in Zurich with UBS Bank. 
3. Anil had set up another offshore company in the British Virgin Islands called 'North Atlantic Trading Unlimited' in 2010. This company had a bank account linked to the Bank of Cyprus.

ANIL'S PREVIOUS CLAIMS

This revelation is contradictory to Ambani's previous claims. You might remember how Anil had testified in a UK court in 2020 and called himself 'insolvent' when three state-owned Chinese banks sued Anil for non-repayment of loans. He had told the court then that:

1. He was bankrupt
2. He had sold off his jewelry for Rs 9 crore to pay off legal expenses and owned 'nothing meaningful'
3. The shares of his company Reliance Innoventures were worthless
4. His wife and family were bearing his costs
5. He had taken a loan of Rs 500 crore from his mother and Rs 310 crore from his son Anmol

PANDORA'S BOX OPENS

But the Pandora Papers showed that Anil Ambani had not two but at least 18 offshore companies in BVI, Jersey, and Cyprus. Some of these companies had direct connections to many of Reliance's companies that were headed by Anil Ambani and the two found above were also included in the list.  

WHAT'S NEXT?

As per the Black Money Act 2015, an assessee has to pay a tax of 30% on the taxable value of undisclosed foreign income and assets. This is accompanied by a penalty that is equal to three times the tax computed.