A day after Union Home Minister Amit Shah asked the administration to fast-track investigation into corruption cases, the Income Tax department raided premises of Hilal Rather son of former finance minister Abdul Rahim Rather in Kashmir and Jammu in alleged loan misappropriation and tax evasion cases, officials said.
“In Kashmir, IT raids pertained to alleged misappropriation of loans taken from the J&K Bank by Hilal and persons linked to him,” they said.
Hilal’s father was the finance minister in the NC government.
A statement issued by the IT department said “search and seizure” operation was conducted on a “prominent business group based in Srinagar”, covering “four premises in the Kashmir Valley and six places in Jammu”.
The statement said “10 other business premises in Ludhiana, NCR and Jammu belonging to parties that have actively assisted the main tax evader in concealing his income and indulging in illegal activities have also been covered under survey action.”
“The group is engaged in the business of real estate and information technology. There were allegations of large-scale diversion and misappropriation of loan taken from J&K Bank by the group,” the statement said.
“During the search, it was detected that the tax evader has been given illegal benefit of Rs 60 crore by J&K Bank. His outstanding loan of Rs 190 crore was settled at Rs 130 crore, although he did not deserve any concessional treatment,” it reads.
The statement adds: “Even the reduced bank liability has either been defaulted by him or the repayment has been facilitated by active connivance of bank officials who have ever-greened his loan account by lending to third parties, who, in turn, gave their loaned funds to the tax evader through dubious financial transactions with him”.
“During the search operation, evidence was found that the main promoter was a director in a Dubai based company. He is also holding and operating a foreign bank account. Neither his interest in the Dubai company nor the foreign bank account has ever been disclosed by him in his tax returns,” the statement adds.
“He is likely to face action under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 as well as other relevant laws of the land for deliberate omission to declare foreign investment as mandated by law,” it adds.
Field enquires have also revealed, the statement said, the “tax evader has sold/booked part of his real estate project of Paradise Avenue near Jammu against unaccounted cash”.
“The cash component has neither been disclosed in tax returns by purchasers of the flats of Paradise Avenue nor has he disclosed these receipts in his books of accounts. Other than the Paradise Avenue project, the tax evader has also undertaken real estate transactions in his personal capacity or in the name of family members wherein allegedly more than Rs 7 crore of unaccounted cash has changed hands,” the statement said.
The statement said that during the demonetisation period, the group had made cash deposits of Rs 1.44 crore, whose source could not be explained by the main promoter during the “course of action”.
IT officials also raided residential and commercial proprieties linked with Congress leader Janak Raj Gupta, who died in 2015.
Teams also conducted simultaneous raids at a prominent jeweler’s shop at Lakhdatta Bazar area.
An official said that the residence of a prominent jeweler in Gandhi Nagar area was also raided.
The Jammu Chamber of Commerce and Industry expressed displeasure over “deliberate targeting” of businessmen in Jammu.
In a letter to Union Home Minister Amit Shah, who is on a two-day visit to Kashmir, JCCI President Rakesh Gupta conveyed Chamber’s protest.
“It has become a common practice to conduct raids at the premises of business people particularly in Jammu province which has left us perplexed, baffled and astonished,” the Chamber president said.
“The JCCI always stood by the government and strongly believe that the tax collections are imperative for nation building,” he said.
“There has been a practice in the business world to observe summer holidays for three to five days in the month of June. It is surprising that even during holiday period the IT department and state taxes department are targeting the honest tax payers and even raiding the closed establishments thus spoiling family holidays and sitting at the closed premises waiting for the owners to come back from their holidays,” Gupta said.
He added that ahead of Shri Amarnath Yatra such actions by the tax departments are “spoiling the peaceful atmosphere and leaving one and all in a chaotic situation”.
ACB registers case in loan fraud case
Meanwhile, Anti-Corruption Bureau, Jammu Thursday booked management, officers and officials of J&K Bank along with illegal beneficiaries involved in financial irregularities/loan fraud worth crores of rupees and conducted searches at various premises, an official statement said.
It said a joint surprise check was conducted by ACB on account of allegations of financial irregularities committed by officers and officials of J&K Bank, wherein it was revealed that various loan facilities were extended to proprietors of a partnership firm M/s Paradise Avenue during 2012 to 2017, in contravention to laid down procedures and resultantly the loan accounts turned into NPA.
“During checking it was found that proprietors of the firm approached J&K Bank, Branch New University Campus Jammu for availing of loan facility of Rs 74.27 crore for setting up a residential township complex under the name and style of ‘Paradise Avenue’ at Narwal, Jammu consisting of 52 flats in each of the towers named Eden & Zion. The loan amount was sanctioned on 30.01.2012 with one of the pre requisite conditions that it has to be disbursed in a phased manner after securing margin of Rs 22.09 core including unsecured loan of Rs 2 core from borrowers on pro-rata basis,” the statement said.
On scrutiny of records it surfaced that loan was in fact sanctioned by the Bank in January 2012 which paved way for the firm to purchase 30 kanals of land from different land owners through registered sale deeds in July 2012 after a gap of six months from sanctioning of loan in favour of the firm meaning thereby that the loanee firm had no title of land in its name when the loan was sanctioned which had to be mortgaged to the bank, the statement said, adding under a pre designed conspiracy hatched by the loanee firm with the bank officials, the amount of sale consideration reflected in the sale deed was shown paid through cheques to the land owners fraudulently and dishonestly with inflated cost of the land whereas, those cheques were actually taken back from the land owners and fresh cheques were issued to them from the loan account of M/s Paradise Avenue and loan account of Shree Simula Solutions, other sister concerns of the leading partner of the firm with objective to buy land in question out of the loan amount alone sanctioned by the bank.
“Since, the proprietors of the firm and the bank officials were fully aware about the rules/norms governing the subject that the loan amount cannot be sanctioned against purchase of land for raising of residential township which is a commercial activity, they in league with the bank officials of the branch in order to seek release of the loan amount had also issued letters addressed to the bank indicating therein that the land owners had supplied construction material to the firm whereas in actual no such material had been in fact purchased by the firm from the suppliers. These were in fact sham transactions with motive to siphoning off the bank money,” the statement said.
It said on further scrutiny of bank records it surfaced that as per terms and conditions the bank was to release the amount in phased manner, however, by March 2014, it had instead made 100% disbursement in first phase only thereby conferring undue pecuniary advantage upon the beneficiary firm. The statement said the firm borrowed three additional loans worth 68.91 crores, 20 crores and 14.5 crores.
“Hence in total the proprietors of the firm managed to obtain Rs 177.68 crore loan illegally and fraudulently in connivance with bank management. The repayment of the loan was to start from September 2017 with a quarterly installment of Rs 11.27 crore, however, the proprietors turned willful defaulters by not making repayment with sole objective to get their loan account declared into NPA and consequently they succeeded in their goal wherein on 31.12.2017 loan account was declared NPA by the bank management,” the statement said.
“The deep rooted conspiracy between bank management and beneficiary firm is evident from the fact that principal loan of Rs 177.68 crore was settled at Rs 130 crore under One Time Settlement (OTS) illegally and against the bank norms thereby the bank management by abuse of their authority waived off Rs 50 crore on principal amount which has inflicted a huge loss to the bank. Even in response to OTS, the cheque issued by the borrower for Rs 40 crore towards OTS has bounced,” said the statement.
“…consequently a formal case FIR No. 13/2019 was registered in P/S ACB Jammu for investigation. After the registration of the case searches were conducted at various premises of individual and companies connected with the firm after obtaining search warrants from the court. During search, incriminating material such as laptops/documents were seized. The investigation of the case is going on,” said the statement.