by Harish Gupta, National Editor, Lokmat Group
Nirav Modi fall out
500 get Income Tax notice for buying jewellery in Cash
Abhishek Manu Singhvi denies charges
IT took no action after January 2017 raids on Modi stores
Harish Gupta
New Delhi, Feb 20
The Income-Tax's Investigation unit at Jhandewalan has issued over 500 notices to top echelon of Delhi, Mumbai and other cities who made huge cash payments to Nirav Modi establishments to buy gold & diamond jewellery.
The first tranche of IT notices was issued to the Who's Who of the society as they purchased designer's jewellery from the Nirav Modi up-market stores by making cash payments. Interestingly, all these purchases were made by them during the pre-Demonetization era i.e. before November 16, 2016. The computer generated entries with bills and receipts were recovered in country-wide raids by the Income-tax department last year only.
Interestingly, the Income-tax department had compiled these huge bunch of documents after it conducted raids on the Nirav Modi stores in January 2017. The IT had conducted raids on other jewellers also as the government felt that bullion traders and jewellers are a major source of generating black money.
In fact, the Income Tax notice to the wife and sons of senior Congress MP and top lawyer Abhishek Manu Sanghvi in connection with the cash transactions was based on documents recovered during January 2017 raids.
The official sources said here today that the notices were not part of any political design or vendetta. Rather, the IT woke up after the CBI and Enforcement Directorate conducted raids on the premises of Nirav Modi and Mehul Choksi. The IT department took no visible action against Nirav Modi after the January 2017 raids,. Rather he flourished more and more. It was only after the PNB lodged a CBI FIR and ED raided, the IT department also woke up. It provisionally attached 29 properties and 105 bank accounts of the diamond merchant, his family and firms as part of its tax evasion probe, on February 17. The department also slapped the new anti-black money act against him for allegedly holding illegal assets abroad. In fact, the the 500 IT notices sent to biggies are based on the findings of January 2017 report.
The Income Tax Department's appraisal report of January 2017 raids, had flagged several suspected irregularities on the part of the Nirav Modi group of companies. The report said that the group accepted cash from customers for sale of jewellery and diamonds that were “over and above” the sale consideration as recorded in the account books. Modi was also confronted by the IT department and got no satisfactory explanation. During the check period, the agency found cash receipts of over ₹158 crore had been recorded from customers.
Based on the document seizures during searches, the tax officials also found that a company had received ₹284 crore from two companies based in Cyprus and Mauritius between 2013-14, in the form of share capital and high share premium. The source of funds and “creditworthiness” of the overseas companies were not explained properly.
The subsequent probe revealed that the same company had received ₹271 crore from another Singapore-based firm. The department found a huge difference in stock valuation of the group’s SEZ units in Hyderabad allegedly over ₹1,216 crore, indicating “unaccounted sale” of imported diamonds.
