The Income Tax department has unearthed over Rs. 200 crore in a 48-hour-long raid at a Credit Co-operative Society in Bengaluru.
IT found it to be allegedly running a chit fund and dubious transactions operation with the active involvement of its CEO with the help of family members. The operation, which concluded in the early hours of Republic Day, revealed that the society had mobilized the amount from a ‘claimed’ 30,000 members and depositors as on 31st March, 2016.
The taxman, at the end of search operations at five branches of the credit co-operative society reported the alleged irregularities to the RBI, the Enforcement Directorate, the CBI and state government authorities for further action.
The raids which commenced on the early hours of January 24, concluded on January 26. The society allegedly turned depositors into members of the society first with an admission fee.
“It was noticed that whoever approached the organization 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,” said the I-T department report.
It had also started locker facility for the members last year. In a tie-up with a nationalized bank, the members could also do electronic fund transfers and issue bearer cheques. However, neither the Society complied with statutory regulations nor collected PAN from the account holders. It also did not deduct any TDS on interest paid to the account holders.
The co-operative society headquartered in Malleshwaram.
It was also found during the raid that substantial amount of cash deposits and loan repayments were made to the society after Prime Minister Narendra Modi announced the withdrawal of Rs. 500 and Rs. 1,000 notes on November 8 last year.
“Further, during search proceedings, it was noticed that substantial cash deposits and loan re-payments were made after demonetization 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 organization as V Credit Cooperative Society founded in 1990.
IT officials said that it was one of the largest instances of black money generation by cooperative societies or banks having been unearthed in the wake of demonetization. The report said the IT department suspected that all this was being done by the society “to camouflage the real owners of these (suspect) deposits.”