After it seized US government bonds worth Rs 28,000 crore ($5 billion) from a Tamil Nadu businessman, Income Tax department has decided to approach American authorities to get validated the authenticity of these securities.
The huge quantity of the US treasury bonds were recovered by the tax sleuths on New Year's eve during a raid of the premises of the businessman in Tamil Nadu. The businessman also happens to be a commodity broker.
These bonds will also be sent to the tax department's forensic laboratory in Mumbai to ascertain their "genuineness", I-T department sources said today.
The tax department's investigation wing in Chennai has approached the Central Board of Direct Taxes (CBDT) in Delhi for issuing a formal request to get the seized bonds validated from the Internal Revenue Service (IRS) Department of the US, the sources said.
Individuals are not allowed to hold foreign securities worth such a large amount and the total amount seized in this haul represents nearly one-tenth of the total US treasury holding of the Indian government.
The Indian government's total holding of US treasury bonds is estimated at over $50 billion, while individuals are not allowed to hold foreign securities worth more than a few lakhs of rupees. The holding of even institutional investors are capped at $1 billion.
The bonds were seized from Tirupur district in Tamil Nadu after the I-T sleuths raided the premises of the businessman, acting on a suspicious report generated by the Financial Intelligence Unit.
Senior I-T officials said the department wants all the information in this regard to be verified before any tax evasion-related action is initiated.
"The US has always cooperated in tax evasion related cases and we expect help from them in this case too," sources said.
