9911796707
TMI BlogSearch and seizure action by Income Tax Department in KarnatakaX X X X Extracts X X X X X X X X Extracts X X X X ..... Search and seizure action by Income Tax Department in Karnataka X X X X Extracts X X X X X X X X Extracts X X X X ..... as to abet them to evade their tax liabilities. A total of 16 premises were covered in the search action. A large number of incriminating evidences in the form of hard copy documents and soft copy data have been found and seized during the search action. The seized evidences revealed that these Cooperative Banks were involved in rampantly discounting bearer cheques issued by various business enti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties, in the name of various fictitious non-existing entities. These business entities included contractors, real estate companies, etc. No KYC norms were followed while discounting such bearer cheques. The amounts after discounting were credited in the bank accounts of certain Cooperative Societies maintained with these Cooperative Banks. It was also detected that some Cooperative Societies subse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quently withdrew funds in cash from their accounts and returned the cash to business entities. The purpose of such discounting of large number of cheques was to mask the real source of the cash withdrawal, and to enable the business entities to book bogus expenses. In this modus operandi, Cooperative Societies have been used as a conduit. Further, by using this modus operandi these business entiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es were also circumventing the provisions of the Income-tax Act, 1961, which limits the allowable business expenditure incurred other than by account payee cheque. Bogus expenditure booked in this way by these beneficiary business entities, could be to the tune of about Rs 1,000 crore. During the search, it was also found that these Cooperative Banks allowed opening FDRs by using cash deposits wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thout adequate due diligence, and subsequently sanctioned loan using the same as collateral. Evidence seized during the search revealed that unaccounted cash loans of over Rs 15 crore have been given to certain persons/customers. It was also unearthed during the search action that the management of these Cooperative banks have indulged in generating unaccounted money through their real estate & o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther businesses. This unaccounted money, has been brought back in the books of account, by multiple layering, through these banks. Further, the bank funds were routed, without following due diligence, through various firms and entities owned by the management persons, for their personal use. The search action has resulted in seizure of unaccounted cash of over Rs 3.3 crore and unaccounted gold je ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wellery worth over Rs 2 crore.
Further investigations are under progress. X X X X Extracts X X X X X X X X Extracts X X X X
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