The crowded neighbourhood of Maulana Chawl, which houses over 700 tenements in Mumbai’s eastern suburb of Ghatkopar and is popularly known as Kholis, is on edge since the arrival of some unexpected visitors on Tuesday. Income Tax officers came to conduct a raid at one of the flats in Unity Apartments which shares a boundary wall with Maulana Chawl. According to sources, it was learnt that the resident of the flat had used the bank accounts of hundreds of residents of Maulana Chawl to convert scrapped notes into new currency. The account holders, in turn, got 15 per cent commission for such transactions.
During the raid, tax officials recovered more than Rs 30 lakh in Rs 2,000 notes from the 225 sq ft flat, multiple sources said. The findings of the tax department are likely to be shared with the CBI for further probe, the sources added. “The search operation began at 7 pm and went on till 3 am. They found Rs 30 lakh in new notes. They were kept in big bags. Everyone in the neighbourhood knows about the raid but they are scared to mention it,” said a security guard at Unity Apartments. With this development, Mumbai chawls have come under the scanner of investigative agencies for possible illegal currency swaps.
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Explaining the illegal conversion of currency notes, a source said that a “main agent” would receive money from clients who wanted to convert their old currency into valid legal tender. This money was then distributed to several sub-agents — one of whom is suspected to be the Unity Apartments resident. “These sub-agents would contact residents of Maulana Chawl who had bank accounts with a balance of over Rs 20,000. The slum dwellers would withdraw Rs 20,000 a week from their bank accounts in new notes and deposit Rs 23,000 in old notes of Rs 500 and Rs 1,000. This cycle would be repeated. The slum dwellers earned a commission of 15 per cent from the sub-agents for these transactions,” said the source. The new notes were then handed over by the sub-agents to the main agent, who charged 30 per cent commission.
After the demonetisation of Rs 500 and Rs 1,000 notes, the Finance Ministry set a weekly bank withdrawal limit of Rs 20,000 per account holder. This limit was later raised to Rs 24,000 a week.
“We got to know about the tax raid but we don’t know whose account has been used to convert old currency into new notes,” said a woman sitting at the entrance of Maulana Chawl on Thursday. “Nothing happened on December 6. We have nothing to do with such things (tax raid). We are respectable workers,” said a man who does the laundry at Unity Apartments and lives in the chawl. None of the residents wished to be named.
Since the demonetisation announcement, the Income Tax Department has probed over 400 cases, detecting nearly Rs 2,000 crore in undisclosed wealth and seizing Rs 130 crore in cash and jewellery.
“Detecting serious irregularities beyond the Income-Tax Act, the Central Board of Direct Taxes decided to refer such cases to the ED and the CBI, enabling them to examine the criminal conduct for immediate necessary action. More than 30 such references have already been made to the ED, and are being sent to the CBI,” the Finance Ministry said in a statement earlier this week.