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November 8, 2021

Income Tax Dep Searches Cooperative Bank in Maharashtra and Dry Food Trader

by CA Shivam Jaiswal in Income Tax

Income Tax Dep Searches Cooperative Bank in Maharashtra and Dry Food Trader

Income Tax Department conducts searches in Maharashtra

The Income Tax Department carried out search and seizure operations on 27.10.2021 at the Headquarter and one of the branches of an Urban Credit Cooperative Bank located in Maharashtra. The residence of the Chairman and one of its directors were also covered.

The analysis of bank data on Core Banking Solutions (CBS) and the statements of key persons recorded during the search action has revealed the glaring irregularities in opening the bank accounts. More than 1200 new bank accounts were opened in the said branch without PAN. The investigations have revealed that these bank accounts were opened without following KYC norms and all account opening forms are filled in by the bank staff and they have put their signature/thumb impressions.

In these accounts, multiple cash deposits each of exact denomination of Rs. 1.9 lakh, were made totalling to Rs. 53.72 crore.  Out of these, more than 700 bank accounts have been identified which were opened in series, where cash deposits of more than Rs. 34.10 crore were made immediately within 7 days of opening of bank accounts mainly during the period August, 2020 to May, 2021. These deposits have been structured to avoid mandatory PAN requirement for cash deposits over Rs. 2 lakh. The money has been subsequently converted into fixed deposits in the same branch.

Local enquiries in few cases of such account holders, has demonstrated that these persons are not aware of cash deposits in the bank and categorically denied any knowledge of such bank accounts or even the fixed deposits.

The Chairman, CMD and the manager of the branch, could not explain the source of cash deposits and accepted that these were done at the behest of one of the directors of the bank, who is a prominent local businessman engaged in trading of grains.

 On the basis of the evidences gathered and statements recorded, the entire amount of Rs. 53.72 crore has been restrained. 

Further investigations are in progress.

Income Tax Department conducts searches in Jammu & Kashmir and Punjab

The Income Tax Department carried out search and seizure operations on 28.10.2021 in the cases of persons engaged in the business of processing & trading of dry fruits. 

During the search operations, many incriminating documents including digital evidence were found and seized indicating that the assessee group has been inflating purchases of dry fruits exorbitantly over the years. Seized evidences also support the fact that unaccounted cash has been received back by the directors of the group against payment made for such purchases. Evidence was also unearthed that one of the assessees was maintaining a parallel set of books of accounts and there was a huge difference between the sales and purchases recorded in both the sets of books of accounts. One of the groups is also indulging in unaccounted purchases and sales of dry fruits.  Excess stock to the tune of Rs. 40 crore has been found. The analysis of seized material and evidence collected reveals that one of the groups is also running a benami proprietary concern.  

In both the groups, the claim of deduction under section 80IB of the Income-tax Act, 1961 has been found to be not genuine and is estimated to be around Rs. 30 crore. 

The search action has resulted in seizure of unaccounted cash of Rs. 63 lakh and jewellery of Rs. 2 crore. Fourteen bank lockers have been placed under restraint. The search action has led to the detection of unaccounted income exceeding Rs. 200 crore. 

Further investigations are in progress.

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