J&K Bank irregularities | IT raids Kashmir business group, seizes RS 1.28 cr assets

The Income Tax Department said on Tuesday that it has conducted raids against a Kashmir-based business group and seized unaccounted assets worth Rs 1.28 crore in connection with its tax evasion probe against entities linked to the financial operations of J&K Bank.

Alleged irregularities in loan disbursal activities andappointments at the state-owned lender came to light recently after the Jammuand Kashmir Anti-corruption Bureau initiated action against it, its formerChairman Parvez Ahmad and others.

   

“In another such follow-up action, a search and seizureoperation has been conducted on a group that is in the business of providingsecurity to business establishments and prominent individuals as well as inrunning hotels in Jammu and Kashmir and other parts of the country,” theCBDT said in a statement without identifying the group.

The action led to the seizure of unaccounted jewellery andundisclosed cash of more than Rs 1.28 crore from the promoter of the group, itsaid.

The Central Board of Direct Taxes (CBDT) frames policy forthe I-T Department.

It said the group that was raided faces allegations of”defrauding public sector banks including J&K Bank in connivance withbank officials, having unexplained cash deposits in the group entities andlarge scale diversion of funds taken for development of an impugned medicalcollege as well as hotels of the group for private gain of the promoters.”

The statement said the raids revealed “apparentsiphoning of loans of more than Rs 74 crore.”

Digital and documentary evidences found during searchclearly reflect machinations of the bank officials in violating prudence normsas well as rules of business to safeguard the bank’s interest in grant of loansthat exceed Rs 200 crore, it said.

These loans have subsequently become non-performing assets(NPAs), it added. The raids revealed “concrete leads ofround-tripping” of more than Rs 125 crore by the promoters of the group.

The money trail suggests use of suspect entities, which haveserved as a conduit to bring back Rs 125 crore as unsecured loans in the handsof the promoter family and its close associates, the CBDT alleged.

It said the tax sleuths detected violation of tax laws andcontravention of banking rules at various levels including in one case where aland in the state was sold to a family member, a man of no means, by thepromoters for a “paltry” sum of Rs 35 lakh.

“Similarly, to obtain a large tranche of loan from theJ&K Bank, the group falsely claimed that 60 rooms of hotel being constructedby them at Mumbai had become operational and cash flow was being generated fromsuch operations,” it said.

However, the agency said, it was found that the hotelbuilding was under construction and was nowhere near completion.

The I-T team also found evidences of “dummy”manpower expenses as a large number of cheques were issued to fictitiouspersons, who were supposedly on the rolls of the group for providing securityto businesses and prominent individuals, it said.The CBDT charged that the main promoter and his family were the managingand controlling trustees of an educational society that ran a now-closedmedical college in Punjab and many irregularities were detected in itsoperation too.

Leave a Reply

Your email address will not be published. Required fields are marked *

nineteen − eleven =