The Income Tax department is bewildered by its massive haul of US Treasury bonds from a Coimbatore stock broker, estimated to be worth Rs 28,000 crore or around $5 billion.

The broker's house and office were searched following a tip-off from the Financial Intelligence Unit, sources said, adding that they are trying to figure out how such a large amount of US bonds were available with one person.

"The tip-off came from the branch of a foreign bank in Chennai and the bonds seem genuine," a government source said. The papers are still being verified, he added.

If corroborated, the amount would nearly equal the total black money seized in two years. Tax experts are, however, sceptical about the possibility of an Indian citizen holding such bonds in India as they cannot be converted into rupees or traded here.

An Indian citizen can hold foreign currency assets of up to $200,000 in all forms but the holding has to be overseas. Any such investment made abroad in movable assets has to be converted into Indian currency on repatriation.

A bond issued by the US Fed can be held by a citizen from a country with convertible currency but India is not one of them. So it is not clear how the foreign bonds were being held by the broker in Coimbatore, sources said.

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