by Elton Gomes
The Income Tax (IT) Department Saturday decided to reassess tax returns of more than 50 Indian high net-worth individuals (HNIs) who have made purchases from firms owned by absconding diamantaire Nirav Modi, official source said. The sources further said that the tax department went ahead with the step after several individuals denied making cash payments to Nirav Modis firms. The department had sent notices to these individuals asking them to explain the source of income for the purchases made.
Officials claimed that the department has collected documents that indicate that certain buyers bought high-end jewellery, and paid some amount by cheque or card and the rest in cash. Replying to the tax notices, most people said they had not made any cash payment. However, this statement does not seem to match the data acquired by the IT department in relation with sales made by Nirav Modi firms.
Company books have revealed that payments were received after they were split between cheque/card transactions and cash, officials noted. Therefore, they decided to re-assess the income tax returns of more than 50 such people starting from the assessment year 2014-15. If any discrepancy in concealed cash payments is revealed, officials said that the HNIs could be charged with tax evasion, with further action being initiated. Officials added that more cases of a similar nature are under preliminary probe. On Thursday, it was reported that the tax department raided a hospital allegedly involving the sister of political activist Yogendra Yadav.
IT department raids hospital owned by Yogendra Yadav’s sister
On Wednesday, the IT department raided several premises of a hospital in Rewari, Haryana, that is owned by Swaraj India chief Yogendra Yadavs sister. The department recovered Rs 22 lakh in cash, wherein it was alleged that the owners bought jewellery and made cash payments to a Nirav Modi.
However, Yadav claimed that the raid was conducted with an intent to “intimidate” and “silence” him. Yadav has been a vocal supporter of farmers. In Rewari, he had launched a campaign demanding fair crop prices for farmers and was against liquor shops in the city.
Officials said that the searches led to Rs 22 lakh cash being recovered from the Yadavs’ residence. “The current cash limit in the hand of a person is Rs 2 lakh and the source of this recovered cash amount of Rs 22 lakh is being probed,” an official said, PTI reported.
The IT department stated that they were able to find some links to the Nirav Modi case. We have searched the two premises, and we have found some links with the Nirav Modi case because some family members [of Yogendra Yadav] have made certain purchases for which payments in cash have been made, the tax department spokesperson told the Hindu. The spokesperson added, We found evidence of that. We have also found evidence of unaccounted income. About ?20 lakh of cash has been discovered till now and we are investigating further.
Yadav vehemently denied any wrongdoings and said that his sisters have been diligently paying all their taxes. This is ridiculous, to allege any connection to Nirav Modi, Yadav told the Hindu.
Old notes used to make purchases?
In February 2018, the New Indian Express reported that the IT department would interrogate several regular clients of Nirav Modi after it was revealed that old notes were used to purchase jewellery after demonetisation was announced in November 2016.
According to officials, purchases up to Rs 193 crore were made only in cash. During the searches conducted in their offices and stores across the country, what came to our notice was that immediately after demonetisation, a lot of cash purchase happened at his stores, which was done by very high profile buyers, a senior IT official told the New Indian Express.
Nirav Modis collections were usually priced between Rs 5 lakh to Rs 50 crore. His clientele included Kate Winslet, Deepika Padukone, Liza Hayden, among others, and Modis collections were the most sought after jewels around the world.
Elton Gomes is a staff writer at Qrius