Finmin begins probe into deposits of unaccounted cash by jewellers during demonetisation: Sources

New Delhi: Armed with information emanating from data analytics, the finance ministry has initiated an enquiry into huge amount of cash deposited by jewellers, disproportionate to their known sources of income, during the demonetisation period.

These jewellers under scrutiny have also not reflected such transactions in their return of income for the Assessment Year 2017-18, sources said.

It has been found that huge amount of unaccounted cash was deposited by a number of jewellers during the demonetisation period which they could not explain or justify as sale proceeds and which in one of the case was almost 93,648 per cent of the cash deposited by him vis-a-vis the corresponding period of earlier year, sources said.

The most interesting case is from Gujarat, where a jeweller under scrutiny was found to have deposited cash of Rs 4.14 crore during the demonetisation phase (November 9, 2016, to December 30, 2016) as against a deposit of Rs 44,260 during the corresponding period a year earlier, showing an increase of 93648 per cent, sources said.

A few cases of jewellers were selected for scrutiny to examine the issues of large value cash deposited during the demonetisation period, large increase in unsecured loans during the year and of large squared up loans during the year.

According to sources, a few highlighted cases with mismatched data found in data analytics show that during demonetisation, some jewellers with income in the returns as low as of Rs 5 lakh had deposited cash in crores within two or three days.

One of them with an annual income of Rs 1.16 lakh only deposited cash of Rs 4.13 crore in just three days; another one with an annual income of Rs 2.66 lakh deposited cash of Rs 3.28 crore in two days; yet another one with an income of Rs 5.4 lakh deposited cash of 2.57 crore.

Interestingly, sources said, in one such case with an annual income return of only Rs 64,550, the jeweller had deposited more than Rs 72 lakhs during demonetisation.

In another case, with annual income return of only Rs 3.23 crore, the jeweller had deposited more than Rs 52.26 crore in cash.

It was found that he had Rs 2.64 lakh only as cash in hand on November 9, 2015, while as on November 9, 2016 cash in hand was more than Rs 6.22 crore, sources said, adding, there was an increase of 23,490 per cent in cash in hand with no satisfactory explanation.

In another modus operandi, they had shown advances from various unknown customers in cash below Rs 20,000 each and deposited the same in a bank account. Later on, they returned back such advance amount to the same customers without any purpose.

Also, part payments were made after depositing cash in bank during demonetisation and still substantial amount of such creditors was outstanding up to end of the year, sources said.

The most interesting fact was that while uploading audit report along with Form 3CB before filing return of income, a few did not upload profit and loss account of their own but of some other firm, sources added.