Demonetisation scanner: Massive fraud by jewellers during note ban detected by I-T dept

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January 21, 2020 4:18 AM

Apart from large cash deposit not commensurate with income profile, the department scrutinised cases where taxpayers reported massive increase in unsecured loans during the year or loans fully paid involving huge amounts

demonetisation, jewellery sectorMost of the scrutinised cases revealed a similar approach to masking black money

Several jewellers have been put under scrutiny by the income tax department in cases of alleged large and disproportionate cash deposits during the demonetisation period (November 9-December 30, 2016). In some cases, some of these jewellers have been found to have deposited nearly 1,000 times as much cash during this period compared to the year-ago period, sources said.

Apart from large cash deposit not commensurate with income profile, the department scrutinised cases where taxpayers reported massive increase in unsecured loans during the year or loans fully paid involving huge amounts, the sources said. These jewellers under scrutiny have also not shown the cash so deposited in their return of income for the AY2017-18, which triggered the data analytics system of the department.

“A Gujarat-based jeweller was found to have deposited cash of over Rs 4 crore during demonetisation against just over Rs 40,000 a year ago,” a tax official privy to the scrutiny said.

Most of the scrutinised cases revealed a similar approach to masking black money. The jewellers, when asked to explain the discrepancy, claimed cash deposits were part of sale proceeds or loan/cash received as advance from unknown customers towards purchase in October 2016. However, they failed to furnish complete bills against such purchases.

Many of these jeweller were red-flagged by the system as their cash deposits amounted to multiple times of their declared income of a few lakhs in previous years. “One jeweller with a declared annual income of `26 lakh, claimed that he received nearly `10 crore in installments days before demonetisation was announced. The advances were claimed to have been received from 573 persons. However, details such as address and contact numbers were not provided of these persons who were claimed to have provided such advances,” the official said.

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