Kolkata: One day in December, taxmen set out from their central Kolkata office in search of people who had converted their cash into gold jewellery after the government’s demonetisation move, partly in an attempt to crack down on black money holders.

Little did they expect their journey to end at a slum in the southern fringe of the city.

But when they stood face-to-face with the likes of Arati Das and Malati Hazra, who work as domestic helps, they soon realized that they were knocking on the wrong doors.

Officers of the income-tax (I-T) department from across the country have exchanged notes on this, and it is clear that almost all jewellers who helped people convert cash into gold have tried to conceal the identity of the real buyers by initially giving falsified lists.

In this case in Kolkata, the list came from Senco Gold Ltd, a leading Kolkata-based jeweller which is audited by a Big Four company, and has attracted investment from a global venture capital firm.

Senco Gold had admitted in the course of an inquiry to some 8,500 cash transactions taking place at its 79 stores across India on 8 November (the day demonetisation was announced) , almost all below the value of Rs2 lakh—the threshold above which buyers have to furnish the permanent account number (PAN) issued by the I-T department.

When the department asked Senco Gold to name the buyers, the jeweller gave it thousands of names—many of them first-time buyers—with mobile phone numbers. And that list led the taxmen to the south Kolkata slum and many other homes where people were struggling for a living.

“The names and numbers matched, but these people certainly didn’t buy gold from Senco Gold on the night of 8 November," said a top official of the I-T department. Close scrutiny revealed that Senco Gold had given at least 4,000 such names, added this person, asking not to be identified.

Senco Gold did not reply to a questionnaire.

Though these people did not have unreported wealth to hide, they could potentially face criminal proceedings under the Benami Property Act if the department can establish that they lent their names as proxies. If proven guilty, they face up to seven years in jail and a fine of up to 25% of the market value of the property acquired using their names.

But tax officials in Kolkata aren’t immediately going after the domestic helps and street vendors they met at the south Kolkata slum. “These people appear to be victims of data theft, so we aren’t initiating prosecution against them," said the taxman cited above.

In Senco’s case, when the lie didn’t wash, the company eventually had to disclose real identities. “But getting it out wasn’t easy," said another officer of the I-T department, who also asked not to be named.

“In most cases, we were given another falsified list," he added.

In the case of Senco Gold, it took about three weeks to get to the real names.

It appears that Senco Gold was trying to conceal the identity of some 140 people—there could be more—of which many have since come clean and made deposits under the Pradhan Mantri Garib Kalyan Yojana (PMGKY), an amnesty scheme valid until 31 March, said the two officers.

From among these people, a total deposit of Rs5.6 crore has been made under PMGKY, these officers said, adding that the department had started proceedings against Senco Gold for abetting concealment of unreported wealth.

The department’s preliminary investigation shows tens of thousands of unsuspecting people have been named by jewellers across the country and may face criminal proceedings.

Even if they are only victims of data theft, establishing that they hadn’t lent their names isn’t going to be easy, at least for the likes of Das and Hazra from the south Kolkata slum, because they don’t have the money to fight court cases.

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