I-T dept searches business, residential premises in Jammu and Kashmirhttps://indianexpress.com/article/india/j-k-bank-case-i-t-raids-premises-of-former-finance-ministers-son-5802448/

I-T dept searches business, residential premises in Jammu and Kashmir

Sources attributed the ongoing IT raids to recently unearthed alleged irregularities into the affairs of Jammu Kashmir Bank.

J-K bank case: I-T raids premises of former finance minister's son
Congress leader Janak Raj Gupta and his brother Sneh Gupta’s premises were also raided.

Income Tax Department on Thursday conducted searches at ten business and residential premises of state’s former Finance Minister and senior National Conference leader A R Rather and his son Hilal Rather in Kashmir Valley and Jammu region and claimed to have unearthed unaccounted cash and tax evasion worth several crores

Apart from this, it also searched the premises of ten other business premises situated in Ludhiana, NCR and Jammu who had allegedly “assisted the main tax evader in concealing his income and indulging in illegal activities’’, official sources said. The business premises searched for helping Hilal Rather’s Srinagar based business group conceal his income included the ones run by the family members of late Congress leader Janak Raj Gupta and his brother late Sneh Gupta.

Without naming Hilal Rather or his father, sources said that “the group is engaged in the business of real estate and information technology’’. Referring to allegations of large scale diversion and misappropriation of loan taken from Jammu and Kashmir Bank by the group, officials said that it was detected during searches that he had been “given illegal benefit of Rs 60 crore by the J&K Bank’’ as his outstanding loan of Rs 190 crore was settled at Rs 130 crore although he did not deserve any concessional treatment. Moreover, “even the reduced bank liability has either been defaulted by him or the repayment has been facilitated by active connivance of bank officials who have ever greened his loan account by lending to third parties who, in turn, gave their loaned funds to the tax evader through dubious financial transactions with him’’.

During searches, the IT officials claimed to have found evidence that the main promoter of the business group was a Director in a Dubai based company, besides holding and operating a foreign bank account, they said. However, he has never disclosed in his tax returns about his interest in the Dubai company, nor the foreign bank account, officials said, adding that he is “likely to face action under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 as well as other relevant laws of the land for deliberate omission to declare foreign investment as mandated by law’’.

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Pointing out that field enquiries have also revealed that the tax evader has sold/booked part of his real estate project “Paradise Avenue’’ near Jammu against “unaccounted cash’’. “The cash component has neither been disclosed in tax returns by purchasers of the flats of Paradise Avenue nor has he disclosed these receipts in his books of accounts,’’ they added.

“Other than the Paradise Avenue project, the tax evader has also undertaken real estate transactions in his personal capacity or in the name of family members wherein allegedly more than Rs 7 crore of unaccounted cash has changed hands,’’ officials said. During demonetization also, the group had made cash deposits worth Rs 1.44 crore, they said, adding that the main promoter could not explain the source of these cash deposits during the course of search action.

Meanwhile, Anti-Corruption Bureau formally booked the management, officers and officials of the J&K Bank along with illegal beneficiaries involved in financial irregularities and loan fraud worth crores of rupees, said official sources without naming any person including Hilal Rather or any of his family member.

Pointing out that it also conducted searches on the premises of the business group, it said that various loan facilities were extended to the proprietors of M/s Paradise Avenue between 2012 to 2017 in contravention to the laid down norms and procedures of the bank. As a result, the loan accounts turned into NPA. During searches, it was also found that the proprietors of the firm had approached J&K Bank’s New Jammu University Campus branch for availing a loan facility of Rs 74,27 crore for setting up a residential township under the name and style of Paradise Avenue at Narwal, consisting of 52 flats in each tower named Eden and Zion.

The loan amount was sanctioned on January 30, 2012 with one of the pre requisite condition it has to be disbursed in a phased manner after securing margin of Rs 22.09 crore including unsecured loan of Rs two crore from the borrowers on pro-rata basis.

However, on scrutiny of bank branch records, it surfaced that the loan amount was in fact sanctioned by the Bank in January 2012 which paved way for the firm to purchase 30 kanals of land from different land owners through registered sale deeds in July 2012 after a gap of six months, meaning thereby that the loanee firm had no title of land in its name when the loan was sanctioned in Jan 2012 which had to be mortgaged to the bank.

Under a well knit and pre designed conspiracy hatched by the loanee firm with the bank officials, the amount of sale consideration reflected in the sale deed was shown paid through cheques to the land owners fraudulently and dishonestly with inflated cost of the land whereas, those cheques were actually taken back from the land owners and fresh cheques were issued to them from the loan account of M/s Paradise Avenue and loan account of Shree Simula Solutions, other sister concerns of the leading partner of the firm with objective and purpose to buy the land in question out of the loan amount alone sanctioned by the bank, officials said. Since, the proprietors of the firm and the bank officials were fully aware about the rules/norms governing the subject that the loan amount cannot be sanctioned against purchase of land for raising of residential township which is a commercial activity, they in league with the bank officials of the branch in order to seek release of the loan amount had also issued letters addressed to the bank indicating therin that the land owners had supplied construction material to the firm whereas in actual no such material had been in fact purchased by the firm from the suppliers, they added.

“These were in fact sham transactions with motive to siphoning off the bank money,’’ officials said, adding that on further scrutiny of the bank records, it also surfaced that as per the terms and conditions the bank was to release the amount in phased manner. However, by March 2014, the Bank had instead made 100 per cent disbursement in first phase only thereby conferring undue pecuniary advantage upon the beneficiary firm.

The firm also borrowed three additional loans worth Rs 68.91 crores, Rs 20 crores and Rs 14.5 crores. Hence in total the proprietors of the firm managed to obtain Rs 177.68 Crores loan illegally and fraudulently in connivance with the bank management and its officials.

The repayment of the loan amounts was to start from September 2017 with a quarterly installment of Rs 11.27 crores. However, the proprietors turned willful defaulters by not making repayment of loan with sole objective to get their loan account declared into NPA and consequently they succeeded in their goal wherein on December 31, 2017 loan account was declared NPA by the bank management.

“The deep rooted conspiracy between the bank management and the beneficiary firm is evident from the fact that the Principal Loan Amount of Rs 177.68 crores was settled at Rs 130 Crores under One Time Settlement (OTS) illegally and against the bank norms as the bank management by abuse of their authority waived off Rs 50 crores on the principal amount which has inflicted a huge loss to the bank,’’ officials said. Even in response to OTS, the cheque issued by the borrower for an amount of Rs 40 crores towards OTS had bounced, it added.

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As the facts and the circumstances emerged during the searches vis-à-vis scrutiny of records of the bank disclosed commission of criminal misconduct by bank management/officers/officials of J&K Bank and the partners of the beneficiary firms and others, a formal case under sections 5(1) (d) of the J&K Prevention of Corruption Act Svt. 2006 read with section 120-B Ranbir Penal Code punishable under section 5(2) of the Act. After the registration of the case searches were conducted at various premises of individual and companies connected with the firm after obtaining search warrants from the Hon’ble court. During search, incriminating material such as laptops/ documents etc. were seized, officials said, adding the investigations are in progress.