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.