Mahendra Chaudhry has substantial amounts of money in overseas accounts but the money belongs to him according to the Independent Tax Inquiry Team report.

The Bruce Cowley headed team report states that during the years 2000 to 2002 inclusive, various amounts were paid for the benefit of Chaudhry into his Australian bank account, much of which Chaudhry transferred into other accounts, also with financial institutions in Australia.

In relation to the principal sum held in these overseas accounts, the ultimate conclusion reached by FIRCA was that it did not constitute chargeable income.

FIRCA's reasoning was based on correspondence to Chaudhry from the organiser of a fundraising group in India, which states and I quote "You may recall that when you were in India in 2000, we had formed a committee which requested you to leave Fiji and stay in Australia since the situation in Fiji was not safe and you were not secure in Fiji. The committee also assured you that it would collect funds for your settlement in Australia" end of quote.

The letter also gives specific details of the various payments made into Chaudhry's financial institution accounts. FIRCA obtained verification of the information in the letter by obtaining copies
of the statements for Chaudhry's accounts which showed that the payments had been made via the Indian Consulate in Sydney.

However some details have not been made public.

In the report the inquiry committee highlights that Chaudhry remains entitled to have information which he disclosed to FIRCA in relation to his income treated with appropriate confidentiality. For this reason, in the body of the report, the committee has not disclosed details of Chaudhry's income. The inquiry team also recommends that matters in relation to his income, which was summarized in an Attachment B, be kept confidential and disclosed only to FIRCA and Chaudhry as they contain detailed information about Chaudhry's tax affairs.

The report reveals that Chaudhry lodged his tax returns for 2000 and 2001 financial years together on 30th May 2002, which was outside the 31 March due date for the lodgement of those returns. The report also states that Chaudhry lodged his return for 2002 on 12 December, 2003 which was also outside the time allowed. It said Chaudhry also did not declare interest on the Australian and NZ financial institution accounts in his tax return lodged with FIRCA in respect of any of the 2000 to 2003 years.

During 2004, FIRCA's data matching unit received information from the Australian tax authorities that Chaudhry had received interest on his Australian accounts. FIRCA then wrote to Chaudhry seeking an explanation, Chaudhry replied indicating that his understanding was that the interest derived in Australia would only be subject to tax when the funds were repatriated to Fiji.

FIRCA then advised Chaudhry that the interest income was chargeable when the interest was credited to his account, irrespective of location and currency.
Chaudhry then sought professional advice and forwarded all the details of his accounts in Australia and NZ.

The report highlights that in his 2004 tax return and those for subsequent years, Chaudhry has declared interest earned on accounts he holds with Australian and NZ financial institutions as part of his income and duly paid the tax assessed.