NEW DELHI: After targeting jewellers, bullion traders and hawala operators, the income tax department has launched a countrywide ‘survey’ on leading builders and their commission agents after intelligence reports indicated that some of them were accepting banned Rs 500 and Rs 1,000 notes to be “adjusted” in fresh property deals.
They were also showing such currency stashes as ‘cash in hand’ in order to make it appear that they did not accept Rs 500 and Rs 1,000 notes after they were cashiered on November 8.
Surveys were conducted on multiple builders and large broking houses in several cities in Delhi-NCR, Bengaluru, Meerut, Allahabad, Lucknow, Kolkata and some cities in Madhya Pradesh. Stocks and cash in hand of each of these builders were verified to check any “adjustment” post-November 8 when the government demonetised Rs 500 and Rs 1,000 notes.
Before demonetisation, most builders appeared to be struggling to collect funds from diverse sources, including private players, to complete their projects running way behind schedule and hand over flats to buyers: a problem which has led courts to rebuke them and order fines. However, intelligence inputs suggested a dramatic reversal of pattern after November 8 with many of cash-strapped builders awash with funds.
Under the ‘cash in hand’ head, a builder keeps money to meet its immediate local expenses to carry out construction activities: a provision which can be used to explain why the money was not in banks. A source said in a project of Rs 100 crore, a builder can easily adjust cash of Rs 10-15 crore as cash in hand. At the same time, developers are also learnt to have resorted to adjusting cash received from sale of property just before the announcement of the ban as cash in hand.
In the past three days, I-T officials surveyed a leading Noida-based builder after the department’s decoy customers found that the builder was accepting illegal tender for fresh transactions in its group projects. The I-T survey was carried out at two other builders in Noida. A similar survey on a Bengaluru-based builder unearthed unaccounted income of Rs 12 crore, according to a top I-T official. During the survey in Bengaluru on Tuesday, the builder disclosed unaccounted income of Rs 12 crore. Officials seized Rs 3.5 crore in cash and Rs 45 lakh worth of bullion from the builder’s premises.
In Madhya Pradesh, I-T teams surveyed 20 jewellers this week and made some cash seizures from builders. Soon after demonetisation of high denomination notes on November 8, the I-T department began a countrywide survey of jewellers and bullion traders engaged in discounting banned notes with bullion to help some launder their illicit cash. The finance ministry has also engaged the Enforcement Directorate to carry out surveys on hawala dealers found accepting banned notes in exchange for dollars and other foreign currencies.
The crackdown by several revenue intelligence agencies, including the Directorate General of Central Excise Intelligence, is currently on across the country.
Credits ET Realty