Demonetisation: Nationwide tax raids conducted to unearth money-laundering

By Dipu Rai 

A month after India demonetised high-value currency notes, the Income-Tax (I-T) department and the Enforcement Directorate (ED) conducted nationwide raids to detect money-laundering and hawala transactions (money transfer without money movement).

Income Tax department officials continued raids on the premises of three Chennai-based businessmen for the second day on Friday. So far, the investigation wing has seized 127 kg of gold bars worth Rs 36.29 crore, fresh Rs 2,000 notes amounting Rs 9.63 crore, and demonetised currency notes of Rs 500 and Rs 1,000 amounting to Rs 97 crore.

They were seized from the residence of Tirumala Tirupati Devasthanam (TTD) member Shekhar Reddy. Also known as Isuka (sand), Reddy runs a sand-mining ring in Tamil Nadu. Eight premises (six residential and two commercial) were searched. Tax authorities told DNA that strong evidence has emerged about the involvement of a senior political figure and some top bureaucrats of Tamil Nadu in the money-laundering ring.

In Delhi, tax authorities stormed Axis Bank's Chandni Chowk as soon as it opened. Around 50 fake accounts were unearthed, DNA reported. 

Officials said that "Rs 500 crore have been deposited in the branch since the day the ban was announced… We are scrutinising the documents of depositors".

They confirmed that two public sector banks were also being raided. This is the second raid at Axis Bank. Last month, officials had apprehended two people with Rs 3.5 crore in new currency notes as they were coming out of the Kashmiri Gate branch. Axis Bank authorities did not respond to repeated calls and messages.

Last week, I-T investigations at Mumbai unearthed a syndicate converting banned currency notes into legal tenders for a commission. I-T officials had sent a few decoy customers, the syndicate agreed to exchange the notes for a 35 per cent commission. The exchange was to take place at the mediator's residence. The mediator was caught red-handed and new currency notes aggregating Rs 29.5 lakh were seized.

Similarly, an investigation into the cash deposits in a bank account in Nagpur revealed that the account holder had no knowledge of the existence of Rs 3.29 crore, deposited after November 8, in her account. It later came to light that there were six more such accounts in her's and her parents' names.

Central Board of Direct Taxes Chairman, Sushil Chandra asked Principal Chief Commissioners to provide manpower from different wings to assist raiding and assessing teams.

(This article first appeared in DNA)