Gujarat: Mahesh Shah makes huge disclosure under IDS, disappears

UPDATE: Gujarat—Mahesh Shah resurfaces in ETV studio; is arrested

He lived in a four BHK apartment in the modest satellite area of Ahmedabad and moved around in auto rickshaws. He apparently never paid any Income Tax, declaring an annual income of less than ₹3 lakhs in his IT returns. But if his Chartered Accountant Tehmul Sethna is to be believed, he was politically well-connected, travelled often to Mumbai and Pune and put up in five star hotels. Strangely, reports in the media now claim that he even owed money to his neighbours.

But Mahesh Shah (67) hit the headlines on Saturday after it became known that the modest, little-known realtor and land broker had gone missing in Mumbai. None of his multiple mobile phones responded and police was informed.

His claim to fame, it was revealed in Ahmedabad on Friday, was his declaration made on September 30 that he had unaccounted cash worth ₹13,800 crore. That was the last day for the Income Disclosure Scheme (IDS) under which people were offered a one-time amnesty for declaring unaccounted income, pay a flat 45% tax and convert the rest into white.

Shah was accompanied by his CA to the Income Tax office. The declaration was followed by Shah filling up the mandatory Form 2 on October 14 this year, which was curiously cancelled by the Income Tax department on November 28. Even more curiously, the Income Tax department carried out searches in his premises as well as premises of his business associates on November 29 and recovered ₹40 lakh in cash and jewellery.

Was Mahesh Shah a front for others?

By way of explanation, the department told the police that it had cancelled the Form 2 because of information that Shah had pulled a fast one and may not be in a position to pay even the first instalment of the Income Tax that amounted to ₹1,560 crore. Curiously again, the tax was to be paid on November 30. Why cancel the form two days before the deadline and conduct searches a day before?

Tehmul Sethna of the century old Apaji Amin & Co LLP headquartered in Ahmedabad, who counseled him to come clean, describes his client as an extremely low profile person who preferred a life of austere simplicity. “He is an elderly gentleman, over 65 years of age and has had a heart problem that called for a stent. I counseled him to come clean,” says Sethna. He, surprisingly, does not know Shah’s profession though. “I know him only since the last three years”, he added, though he confessed that his client had immaculate contacts and had something to do with large chunks of land.

It is suspected that Shah may have acted on behalf of politicians, as their frontman. But following demonetisation on November 8, the politicians may have seen no reason to pay the stiff 45% Income Tax under IDS, opting for converting their money into white by paying a lower commission, which would have left Shah in the lurch.

Sethna, however was at a loss to understand how money laundering was possible in this backdrop before the demonetisation came about.

“I have his numbers but all of them are switched off”, said Sethna. For the moment, Shah has just disappeared leaving the department as well as his CA guessing about his whereabouts.

UPDATE: Gujarat—Mahesh Shah resurfaces in ETV studio; is arrested

RK Misra is a senior journalist based in Gandhinagar, Gujarat