Armed with information emanating from data analytics, the finance ministry has initiated an enquiry into the huge amounts of cash deposited by jewellers, disproportionate to their known sources of income, during the demonetisation period (November 9, 2016 to December 30, 2016).
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 amounts of unaccounted cash were deposited by several jewellers during the demonetisation period, which they could not explain or justify as sale proceeds. In one of the cases, this amount was almost 93,648 per cent of the cash deposited in the corresponding period the previous 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 as against a deposit of Rs 44,260 during the corresponding period a year earlier, sources said.
A few cases of jewellers were selected for scrutiny to examine the cases of large cash deposits during the demonetisation period, the large increase in unsecured loans during the year and the 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 declared incomes of as low as Rs 5 lakh had deposited cash worth crores within just two to 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 one such case involving a jeweller with an annual income return of only Rs 64,550, who 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 that there 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 these advance amounts to the same customers without any purpose.
Also, part payments were made after depositing cash in the bank during demonetisation. Still, a 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 that of some other firm, sources added.