The income tax department (I-T) has seized over 300 signed blank Know-Your-Customer (KYC) forms of at least three public sector banks along with self-attested photocopy of Aadhaar and PAN cards of hundreds of individuals in a tax raid on a prominent event management firm in Mumbai, sources familiar with the development told The Indian Express.
The tax department raided at least five offices of the event management firm on November 20 and recovered a couple of gunny bags full of KYC documents used for opening bank accounts and signed banks slips for exchange of old Rs 500 and Rs 1,000 currency notes along with self attested identity proof of several individuals mostly its employees. The tax department has also found that the event management firm was accepting abolished currency notes by giving backdated receipts of events to its clients.
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“The tax department has traced multiple back-dated entries of events in the book of accounts of the firm. It has also apprehended the cash handlers of the company and several angadias who used to transport cash to other parts of the country on behalf of the event management firm through Whatsapp messages of the key officials of the company,” said sources.
The event management firm which has in the past organised events for large media houses, FMCG and automobile firms across the country is a part of a group that has business interests in real estate, infrastructure and automobile sector.
According to sources, the event management firm was allegedly planning to open bank accounts of its employees to deposit money accepted by the firm in old currency after the government announced its demonetisation drive.
“The agency has seized the books of accounts of the firms, several laptops and digital data from the offices and is currently analysing the extent of fraud perpetuated by the firm,” said sources.
Two days after Prime Minister Narendra Modi scrapped the existing currency notes of Rs 1,000 and Rs 500 to curb corruption and black money, the income tax department raided several hawala dealers and jewellers across the country for cutting barter deals with people to convert invalid currency notes into valid legal tender. An income tax raid on one such jeweler in Mumbai found that on November 9, the total daily turnover of the jeweller jumped 4000 per cent to Rs 25 crore.
“The daily turnover of this Ghatkopar-based jeweller jumped from Rs 60 lakh to Rs 25 crore on one single day after demonetisation. The shop owner helped people convert old currencies into gold at a premium. The tax department has obtained the CCTV footage of the shop and identified all the gold buyers. It will prosecute the jeweler and all the individuals who converted the old currency to gold after the ban,” said a source.
In another case, the department seized sale receipts of a jeweller who has split large sales into multiple transactions valued below Rs 2 lakh to avoid tax net. In this case, the customers used to deposit money in old currency of Rs 500 and Rs 1,000 with the back office of the jewellery firm and collect gold jewellery from the front office of the firm. “The jeweller was charging Rs 52,000 in old currency for ten grams of gold,” the source added.
According to sources, a few hours after the demonetisation announcement, offers were being made to exchange high currency notes for lower denomination notes of a lower value at a premium, or swapping of the currency notes for gold bars or gems and diamonds, and foreign currency.
Sources said that the trend was most visible in cash-driven gold, diamond, steel, pharmaceutical, imitation jewellery and garments trade. The private exchanges were mainly being run by jewellery merchants with a high declared turnover.