Karnataka: I-T dept detects Rs 1,000 cr bogus expenditure after raids on co-operative banks

Mangalore Today News Network

Bengaluru, April 12, 2023: The Income Tax Department said on Tuesday it has detected bogus expenditure and financial irregularities to the tune of Rs 1,000 crore in raids conducted at 16 premises of cooperative banks in Karnataka.

 

The tax authorities started the “search and seizure operation” in poll-bound Karnataka on 31st March.

“These cooperative banks have been found to be engaged in routing of funds of various business entities of their customers, in a manner, so as to abet them to evade their tax liabilities,” according to an official statement released by the Central Board of Direct Taxes (CBDT).

The operation has resulted in seizure of unaccounted cash of over Rs 3.3 crore and unaccounted gold jewellery worth over Rs 2 crore.

Evidence seized during the operation revealed that unaccounted cash loans of over Rs 15 crore have been given to certain persons/customers, the CBDT said. The department didn’t disclose the name of the cooperative banks.  

A large number of incriminating evidence 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 entities, 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, the CBDT said.

The CBDT further noted that the management of these cooperative banks have indulged in generating unaccounted money through their real estate and other 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.

Courtesy: Deccan Herald