[ITR] COMPLEX WEB OF TRANSACTIONS A Multi-Starrer Tax Evasion Plot Stumps
3 views
Skip to first unread message
Dave Karnav
Apr 23, 2013, 1:35:00 AM4/23/13
to nadto...@googlegroups.com
COMPLEX WEB OF TRANSACTIONS
A Multi-Starrer Tax Evasion Plot Stumps I-T Dept
Diamond houses,traders,realtors and petty assistants join hands to evade tax
SUGATA GHOSH & M PADMAKSHAN MUMBAI
When officials of the Mumbai income-tax investigation wing stumbled upon a handful of bank accounts with wild entries,they first thought these were typical money-laundering deals one associates with the seedy underbelly of the financial capital.But as they dug deeper into the money flow,they could slowly piece together an amazing web of transactions that involved diamond houses,construction firms,local traders and an army of lackeys who do nothing other than lending their names for small money.These disparate players come together in circuitous transactions that are carried out to escape tax as well as funnel unaccounted cash into audited accounts of regular businesses.It took us a while to get the complete pictureWe have our eyes on some people.The investigation is on, said a senior official of the Income-Tax Department.The chain starts with some diamond firms that regularly import rough stones on 3-6 months credit.But the simple trade is done differently.The import lands in five consignments: on paper,only one of these is linked to the diamond houses.The other four consignments are received by four assistants of the diamond firm.These assistants,who do not have the means and creditworthiness to import,act as fronts for the diamantaire.Once Customs formalities are over and the assistants take delivery of the diamonds,the stones are handed over to the diamond house,which pays them nothing but a small fee for their services.The four assistants (or the fronts),on the other hand,do not have physical diamond in their possession,but have diamonds on the books of their entities that have acted as importers on behalf of the real diamond company.For the diamond house,its a ploy to lower turnover and evade tax in future.But the chain of transaction does not end here.
QUID PRO QUO WTH LOCAL TRADERS
The next set of players that participates in the transaction is local traders and jewellers who typically use cash to buy diamonds.
A Multi-Starrer Tax Evasion Plot Stumps I-T Dept
Diamond houses,traders,realtors and petty assistants join hands to evade tax
SUGATA GHOSH & M PADMAKSHAN MUMBAI
When officials of the Mumbai income-tax investigation wing stumbled upon a handful of bank accounts with wild entries,they first thought these were typical money-laundering deals one associates with the seedy underbelly of the financial capital.But as they dug deeper into the money flow,they could slowly piece together an amazing web of transactions that involved diamond houses,construction firms,local traders and an army of lackeys who do nothing other than lending their names for small money.These disparate players come together in circuitous transactions that are carried out to escape tax as well as funnel unaccounted cash into audited accounts of regular businesses.It took us a while to get the complete pictureWe have our eyes on some people.The investigation is on, said a senior official of the Income-Tax Department.The chain starts with some diamond firms that regularly import rough stones on 3-6 months credit.But the simple trade is done differently.The import lands in five consignments: on paper,only one of these is linked to the diamond houses.The other four consignments are received by four assistants of the diamond firm.These assistants,who do not have the means and creditworthiness to import,act as fronts for the diamantaire.Once Customs formalities are over and the assistants take delivery of the diamonds,the stones are handed over to the diamond house,which pays them nothing but a small fee for their services.The four assistants (or the fronts),on the other hand,do not have physical diamond in their possession,but have diamonds on the books of their entities that have acted as importers on behalf of the real diamond company.For the diamond house,its a ploy to lower turnover and evade tax in future.But the chain of transaction does not end here.
QUID PRO QUO WTH LOCAL TRADERS
The next set of players that participates in the transaction is local traders and jewellers who typically use cash to buy diamonds.
--
Posted By Dave Karnav to ITR at 4/23/2013 11:05:00 AM
Reply all
Reply to author
Forward
0 new messages