The Income Tax Department recently conducted search and seizure operations in several cooperative banks in Karnataka and found them to be engaged in the routing of funds of various business entities of their customers to enable them to evade their tax liabilities, it announced in a statement.
The exercise was started on March 31, 2023 and covered close to 16 premises. The official releases also said, "Bogus expenditure booked in this way by these beneficiary business entities could be to the tune of about Rs 1,000 crore."
The business entities included contractors, and real estate companies, among others.
Evidence found and seized
The Union Ministry of Finance said many incriminating pieces of evidence that include hard copy documents and soft copy data have been found and were seized during the search exercise. The seized pieces of evidence, according to the ministry, revealed that these banks were involved in "discounting bearer cheques issued by various business entities, in the name of various fictitious non-existing entities."
Seized cash and jewellery
The search action also resulted in the seizure of unaccounted cash of over Rs 3.3 crore and unaccounted gold jewellery worth over Rs 2 crore.
Additionally, during the raid it was also found that no KYC norms were followed while discounting such bearer cheques.
"The amounts after discounting were credited in the bank accounts of certain Cooperative Societies maintained with these Cooperative Banks. It was also detected that some Cooperative Societies subsequently withdrew funds in cash from their accounts and returned the cash to business entities," the release said.
Unaccounted money
Further, during the search it was also found that the management of these cooperative banks had indulged in generating unaccounted money through their real estate and other businesses.
The statement also said that further investigations into the matter are in progress.
With inputs from agencies
