Demonetisation: Decoys, airport swoops marked Income Tax crackdown

Posing as customers in jewellery stores and suspected hawala circuits, which were still accepting notes that were no longer legally valid on Wednesday, the investigators reported high-volume sales, particularly at various jewellers.

Written by Ritu Sarin | New Delhi | Updated: November 12, 2016 12:13 pm
rs 500 ban, rs 1000 ban, currency ban, narendra modi, black money, income tax, corruption, modi curb corruption, hawala raid, income tax raid, gold raid, decoy operation, delhi airport, indian express news, india news, business news Income Tax Department Building. (Express photo by Vasant Prabhu)

MINUTES AFTER Prime Minister Narendra Modi ended his address to the nation Tuesday, announcing the withdrawal by midnight of Rs 500 and Rs 1,000 notes to curb corruption and black money, Income Tax sleuths started moving into crowded markets in several cities to track violations of the new guidelines.

Posing as customers in jewellery stores and suspected hawala circuits, which were still accepting notes that were no longer legally valid on Wednesday, the investigators reported high-volume sales, particularly at various jewellers. They indicated that customers were initially paying 20 per cent more cash than the tagged price, going up later to 40 or even 50 per cent of the value of bullion.

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It was this “decoy operation” that finally led to the simultaneous “surveys” across the country on Thursday by the Income Tax Department, including Delhi’s famous “jewellery districts” Karol Bagh and Chandni Chowk; Opera House and Zaveri Bazaar in Mumbai; and large stores in Chandigarh, Ludhiana, Jalandhar, Bengaluru and Kolkata.

The results of the “surveys” are still being compiled but tax officials say their purpose — deterrence — has been achieved.

Early reports show that jewellers and hawala traders in several cities took advantage of the panic in two ways:

# Offering old stocks that did not figure in their account books.

# Offering devalued jewellery items and gold slabs and providing back-dated bills showing amounts below Rs 2 lakh each so that PAN card details need not be filled in.

I-T sleuths are now finalising default cases against at least one jeweller in Delhi from whom Rs 58 lakh in cash was recovered and who had allegedly sold stock worth Rs 2 crore more than what was recorded in the sales register on Tuesday night and Wednesday.

The combined “surveys” in the three cities of Punjab resulted in “extra” (unbilled) sales of over Rs 20 crore.

I-T investigators have also swooped down on hawala traders and “book keepers” who were depositing large amounts of cash brought by jewellers for money-laundering.

“We had planned the decoy operation carefully and it has brought the desired results. There is a scare in the bullion market and the large jewellery districts now, since gold was the easiest commodity for customers to dispose of unwanted cash deposits. The targetted traders have been found to have committed violations on several counts,” said a senior IT official.

I-T sleuths have also reported that since Tuesday night, traders were moving large volumes of banned currency from one city to another. Following a specific tip-off, a passenger from Hyderabad was detained at Delhi airport with Rs 500 and Rs 1,000 currency notes totalling over Rs 50 lakh. On Friday, another passenger from Kanpur was detained at Kolkata airport with Rs 1.1 crore worth of banned currency.

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  1. R
    rajesh
    Nov 12, 2016 at 8:37 am
    How currency switch impacts the financially excluded people?lt;br/gt;The currency switch will result in terrible hardship for low-income groups. This will be mainly because of two facts.lt;br/gt;1. In India, only 28%-32% people have access to financial insutions, including post offices and banks. lt;br/gt;2. 33% of the 138,626 bank branches are in 60 Tier-1 and Tier-2 cities, leaving rural India at a huge disadvantage.
    Reply
    1. A
      ams
      Nov 11, 2016 at 11:30 pm
      How many paaaliticians and big industrialists are caught in this??? ZERO right???? Chaddi sarkar is only publicity sarkar giving hardship to common man and milking each and every story falsely for political gains. These b@@@stars need to be taught a lesson in all upcoming state elections!!!!
      Reply
      1. A
        ashok s
        Nov 12, 2016 at 12:53 am
        Just by giving one example I.t dept is patting its back , shame. They are not averse of practical modus opei. For e.g a Muslims family has large extended members and if they deposits capped amount in each account it becomes white. So our country has potion of this jerks at around 30 to 40 CR's multiple by capped amount you get a figure
        Reply
        1. A
          ashok s
          Nov 12, 2016 at 2:49 am
          Well said and best written comment Mr Joseph r Stephen
          Reply
          1. A
            ashok s
            Nov 11, 2016 at 11:42 pm
            What about builders, they are still doing their business as normal. Their network is more sophisticated then jewellers that I.t will need other machinery to help them
            Reply
            1. T
              T DUTTA
              Nov 12, 2016 at 7:08 am
              ACTION AGAINST BLACK MONEY WILL REMAIN INCOMPLETE WITHOUT TOUCHING THE FILM INDUSTRY
              Reply
              1. T
                T DUTTA
                Nov 12, 2016 at 7:03 am
                CASINOS MIGHT HAVE ATTRACTED BLACK MONEY LIKE MAGNETS
                Reply
                1. T
                  T DUTTA
                  Nov 12, 2016 at 7:03 am
                  DEMONETISATION 12 HOURS BEFORE THE START OF INDIA-ENGLAND TEST SERIES WAS A VERY GOOD MOVE---OBVIOULAY IT MADE CRICKET BETTING SYNDICATE UNHAPPY
                  Reply
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