Business Spotlight

Delhi High Court Upholds LOC Black Money Launderer Ashok Mittal Of Hotel Royal Plaza By Abhinav Sharma

Income Tax has further issued notice to Ashok Mittal dated December 29, 2022, under Section 10 of the Black Money (Undisclosed Foreign Income and Assets) Imposition of Tax 2015, asking for the source of investment in the following offshore (foreign) companies.

Delhi High Court
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The Delhi High Court has refused to recently quash the Income Tax (IT) investigation wing LOC (Look Out Circular) opened against Ashok Mittal of Hotel Royal Plaza, Delhi, on fear of him slipping away from India like his business partner Nand Kishore Chaturvedi wanted in the in-famous Pushpak Builders case that had rocked Maharashtra politics for his alleged link with Shiv Sena supremo Uddhav Thackeray's family members.

In a ruling from November 22, 2023, Justice Subramonium Prasad said, "Learned Counsel for Income Tax Department has filed written submissions stating that, according to the information available with the Department, the Petitioner (Ashok Mittal) has undisclosed foreign assets and income in four different countries and that the LOC was not opened merely on the basis of non-disclosure of foreign income and assets in the IT return for four years, i.e., 2015-16, 2016-17, 2017-18, and 2018-19. "He also states that there is additional material with the Department on the basis of which the LOC has been opened against the petitioner," the order added. The case will again come up for hearing on December 12.

The LOC was opened last year after IT raided Hotel Plaza and Ashok Mittal's other businesses in Delhi and Mumbai. The probe revealed that Nand Kishore Chaturvedi and Ashok Mittal are the kingpins behind the Malaysia-based company Hillcrest Realty, which made a major investment of ill-gotten, undisclosed black money of Rs 28.29 crore in 2003 in the hotel Plaza's parent company. With this investment, Hillcrest Realty gained total control over the hotel's operations and decision-making processes and still continues to maintain it. An investigation has revealed that Ashok Mittal, Nand Kishore Chhaturvedi, and his son Vikram Mittal are also common directors of two companies, namely M/s Franktown Investment and Trading Company Private Limited and M/s Niranjan Housing Private Limited. Following these revelations, the IT department raided Ashok Mittal's businesses, including Hotel Plaza, in 2022.

Earlier, on July 12, 2022, Amitabh Mishra, Deputy Director of Income Tax, wrote a letter to the Deputy Director, Immigration, requesting the opening of an LOC against Ashok Mittal and his family members for their roles in tax evasion cases under their probe. Under the subject issue of LOC, the department gave details of their passports: Ashok Kumar Mittal (PASSPORT NO. Z3541677, COUNTRY OF ISSUE: INDIA). The department also provided information on their travel history and any other relevant details.

The letter states that the search and seizure action under Section 132 of the Income-tax Act of 1961 was carried out in the case of Ashok Mittal, Vikram Mittal, and his companies. "During the course of the search action, evidence showing high-value cash transactions and undisclosed foreign assets of Ashok Kumar Mittal, Vikram Mittal, Ruchi Mittal, and Nirupama Mittal has been found, which would have huge tax implications for them along with other consequences under the Black Money (Undisclosed Foreign Income and Assets) Imposition of Tax Act 2015, which include their criminal prosecutions," highlighting the seriousness of the offence committed by them. "They appear to have committed offences under sections 50 {Failure to furnish return in relation to foreign income and asset), 51(1) [wilful attempt to evade tax, etc.] under the Black Money Undisclosed Foreign Income and Asset) and Imposition of Tax Act, 2015, which are punishable with rigorous imprisonment up to 7 years and 10 years, respectively, and a fine."

Further emphasising their high possibility of running away, the letter says: "There are very high possibilities that the individuals may try to escape from India so as to avoid their tax liabilities, which are likely to be substantial amounts, as well as other related penal consequences."

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Income Tax has further issued notice to Ashok Mittal dated December 29, 2022, under Section 10 of the Black Money (Undisclosed Foreign Income and Assets) Imposition of Tax 2015, asking for the source of investment in the following offshore (foreign) companies.

S.no of the offshore companies. 

Name of the Company 

Bank Branch/Country 

Bamberg Management Inc 

British Virgin Island 

Hillcrest Realty SDN BHD 

Malaysia 

Snowdonia Overseas Ltd 

British Virgin Island 

Super Gold Trading DMCC 

Dubai 

Danube Trading F.Z.C 

Dubai 

North West Trading FZE 

Dubai 

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