The Income Tax Department initiated search action on 24.11.2021 on a taxpayer in Delhi who has created a beneficiary trust and an underlying company in low tax overseas jurisdiction. The residence and business premises of the assessee were covered in the search action.

The search operation revealed that these undisclosed entities in low tax overseas jurisdictions were holding assets worth ₹ 40 crore in the form of immovable and movable assets. The taxpayer was availing handling services of a foreign Bank having branches in India that offers wealth management, financial planning, asset allocation, equity research, fixed income, investment strategies and fiduciary services.

During the search operation at his residence, corroborating evidences in the form of e-mails and documents have been found establishing his beneficial ownership of the foreign assets. In his statement recorded during the search, he has admitted to ownership of foreign assets. At the business premises, one hard disk containing data in the form of parallel set of books of accounts has been found. A preliminary analysis of such gathered evidences indicate understatement of domestic income to the tune of ₹ 30 crore from business undertaken in India.   

Further investigations are under progress.

Undisclosed foreign assets trigger search action; evidence indicates beneficial ownership, income understatement, and further investigation ongoing Searches at the taxpayer's residence and business premises uncovered a beneficiary trust and an overseas company in a low tax jurisdiction; e mails, documents, and the taxpayer's recorded statement link him as the beneficial owner of foreign assets. A hard disk with a parallel set of books was found and preliminary analysis indicates understatement of domestic income from Indian business activities; further investigation is ongoing.