Bengaluru: The Income Tax department has claimed to have unearthed one of the largest black money scams post-demonetisation after it raided a city-based cooperative society and found it to be allegedly running a chit fund and dubious transactions operation worth Rs 200 crore with the active involvement of its CEO.
The taxman, at the end of search operations at five branches of the credit co-operative society here yesterday, reported the alleged irregularities to the RBI, the Enforcement Directorate, the CBI and state government authorities for further action.
The co-operative society headquartered in Malleshwaram, as per a report prepared by the I-T department and accessed by PTI, had a "claimed" total membership of about 30,000 and deposits mobilised by it stood at about Rs 200 crore, including those before November 8 last year when the note ban was declared by the government.
"Further, during search proceedings, it was noticed that substantial cash deposits and loan re-payments were made after demonetisation on November 8, 2016. The department is verifying such deposits. Preliminary investigations indicate that a substantial part of the deposits are from undisclosed sources," it said.
Officials identified the organisation as V Credit Cooperative Society founded here in 1990.
I-T officials said it was one of the largest instances of black money generation by cooperative societies or banks having been unearthed in the wake of demonetisation.
The report added that while the society was taking tax benefits by virtue of being registered under the State Registrations Act, it was carrying out normal "banking operations" in alleged violation of laws.
"It was noticed that whoever approached the organisation for making the deposits, was first made a member of the society for a nominal admission fee. Subsequently, members could make time deposits, purchase cash certificate, operate the savings account, among others. This organisation does not comply with statutory regulations and does not take PAN from the account holders, and it does not deduct any TDS on the interest payment to the account holders.”
"Further, it had also started locker facility for the members last year. During the verification, it was noticed that this organisation, in tie-up with a nationalised bank, enabled the members to carry out electronic fund transfers and issued bearer cheques," it said.
The report said the I-T department suspected that all this was being done by the society "to camouflage the real owners of these (suspect) deposits."
A senior official said "three families" have already been questioned in the case and summons to hundreds of others are being issued.
"They (families questioned) have accepted that the deposits made by them were their unaccounted incomes. The main person (CEO) involved in bank's operations has admitted to have been running financing and chit funds operations out of books which evidences suggest could be as large as Rs 40 crore or more with an out of books interest payout of more than Rs 9 crore," the report added.
The department also conducted searches on the premises of the CEO and found that "unregistered chit funds and financing was being carried out" using the cooperative society as a bank and with the help of the CEO's relatives.
"The society has also entered into purchase and sale of capital assets and that is being verified," it said adding reports have been sought in this regard from various agencies.
The tax department has already raised serious concerns over the working of a number of cooperative banks across the country in a report claiming they used the "opportunity" of demonetisation to make a quick buck and indulge in money laundering worth several crores.
An analysis report prepared by the department had said it was found that these banks have been involved in generating and routing of black money on an "unprecedented" scale post-November 8 when the currency scrap was announced by Prime Minister Narendra Modi....