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Income Tax Department continues to hit at terror financing activities in J&K Region

March 18, 2019
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Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

New Delhi, 15th March, 2019

PRESS RELEASE

Income Tax Department continues to hit at terror financing activities in J&K Region

Income Tax Department conducted search actions at 5 locations in the Kashmir Valley on 14th March, 2019. Few places in Jammu were also searched. These actions are part of the Department’s continued drive against use of black money by disruptive elements in the State. The operations also send a message of deterrence and obviation to those intending to vitiate the democratic process of free and fair elections.

The preliminary results are extremely encouraging. In the aggregate, undisclosed cash of ₹ 1.44 crore and unaccounted jewellery of ₹ 2.48 crore has been seized. The documentary evidence collected and examined so far shows undeclared property transactions of more than ₹ 41 crore, primarily in the Kashmir valley and concealed financial transactions of nearly ₹ 17 crore. Number of hard disks have also been seized that prima facie corroborate the evidence found in the seized documents. Their analysis is likely to lead to identification of third parties that have indulged in property and financial transactions that have been deliberately concealed from the tax authorities.

One operation was against a prominent LOC trader who apparently used proxies to conduct large cross-LOC trade in the past 6 years. Large undisclosed profit earned by him has been diverted to allegedly suspect elements in the Valley. During the action, documents of transactions in the names of some of the proxies were found. Investigations are in progress to determine the clandestine cross-LOC trade conducted by the tax evader through the Custodian of the Trade Facilitation Center, Srinagar.

In another operation, a big land and property broker of Srinagar was also searched on the same day. He allegedly facilitates absorption of unaccounted cash of undesirable elements of the valley in real estate and immoveable properties in and around Srinagar. Large cache of documents that show property transactions in cash on power of attorneys have been found from his residence. Evidence of series of land transactions have been unearthed by the Department revealing that ₹ 4.21 crore earned from the same was completely concealed from the tax and other regulatory authorities. It is also a matter of record that the tax evader has never filed any income tax return. 2 hard disks have also been seized from his residential premises, which apparently contain details of transactions in property undertaken by different persons through the tax evader. Follow up actions shall be taken up against both sellers and buyers of these properties, who have not shown the source of income to buy the property and neither paid any capital gains tax on its sale.

The Department also covered a hotelier and a retailer of liquor in the Kashmir valley. Evidence found in search shows that he has been earning large undisclosed profits on sale of liquor as well as from his hotel business and he has not shown cash receipts in his books of account. Hard disks containing digital evidence have been seized which support the charge of deliberate attempt to evade tax and earn large income in cash that is willfully and consciously kept outside the tax net.

The family business of another popular business group in Jammu and Katra also came under the scanner. The search action shows that the group has routinely conducted a significant proportion of their business in unaccounted cash and the money so earned has been round tripped in real estate deals in Jammu and Katra. The untaxed proceeds have also been used to construct a retail mall in Jammu and to acquire expensive jewellery for the family members.

(Surabhi Ahluwalia)

Commissioner of Income Tax

(Media & Technical Policy)

Official Spokesperson, CBDT.

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