Continuing its crackdown on terror funding in Jammu and Kashmir, the Income Tax department on March 15 conducted searches at five locations in the Kashmir Valley along with a few places in Jammu.
According to sources, undisclosed cash worth Rs 1.44 crore and unaccounted jewellery worth Rs. 2.48 crore was seized during the searches.
The documentary evidence collected and examined so far shows undeclared property transactions of more than Rs 41 crore, primarily in the Kashmir Valley and concealed financial transactions of nearly Rs 17 crore.
Providing details about the raids, a source said, “One operation was against a prominent trader who apparently used proxies to conduct large cross-LOC transactions in the past six years. Large amounts of profit earned by him were diverted to suspect elements in the Valley.”
A large number of hard disks have also been seized according to I-T department officials that prima facie corroborate the evidence found in the seized documents.
A senior official said, “The analysis of the documents and hard disks is likely to lead to the identification of third parties that have indulged in property and financial transactions that have been deliberately concealed from the tax authorities.”
Central Board of Direct Taxes officials said that these operations significantly “send a message of deterrence to those intending to vitiate the democratic process of free and fair elections.”
During the raids, documents of transactions in the names of some of the proxies were discovered.
Investigations are underway to determine the clandestine cross-LOC trades conducted by the tax evader through the Custodian of the Trade Facilitation Center, Srinagar.
In a swoop at multiple points, a big land and property broker of Srinagar was also raided on March 15. Tax officials say that the broker allegedly used to facilitate absorption of unaccounted cash of terror supporters in the Valley in real estate and immoveable properties in and around Srinagar.
A large cache of documents that shows property transactions in cash on the power of attorneys have been found from the residence of this broker.
Evidence of a series of land transactions unearthed by the department has revealed that Rs 4.21 crore earned was completely concealed from the tax and other regulatory authorities.
Tax department records show that the broker has never filed any income tax return. From his residential premises, 2 hard disks have also been seized, which sources say, contain details of transactions in property undertaken by different persons through the broker.
I-T officials say that follow up action will be taken 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.
According to sources, the tax department searches also covered a hotelier and a liquor seller in the Kashmir Valley.
Evidence found in search shows that he has been earning large undisclosed profits on the sale of liquor as well as from his hotel business and has not shown cash receipts in his books of account.
From the premises of the hotel, two hard disks containing digital evidence have been seized which reveal a 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 yet another popular business group in Jammu and Katra region also came under the scanner. The searches at the offices and residences show that the group has routinely conducted a significant proportion of their business in unaccounted cash and the wealth generated 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.