I-T has sent preliminary probe report to CBDT, ED. I-T has sent preliminary probe report to CBDT, ED.

THE INCOME-TAX department is investigating a series of “suspicious” sales in cash totalling nearly Rs 100 crore from three New Delhi outlets of a major gold trader between 8 pm and 12 midnight on November 8, after Prime Minister Narendra Modi announced the withdrawal of Rs 500 and Rs 1,000 notes.

According to official sources, the department found that Kundan Care Products Ltd (KCPL) sold around 200-250 kg of gold from these outlets that night, of which sales worth nearly Rs 75 crore were recorded within those four hours at one outlet in the Kucha Mahajani area of Chandni Chowk.

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Sources said the sales conducted that night at the Kucha Mahajani outlet were of below Rs 2 lakh per customer, without their PAN number being recorded. Under the law, sellers are not required to obtain PAN numbers of customers for sales below Rs 2 lakh.

Sources said that the I-T department has sent its preliminary report on this investigation to other agencies, such as the Central Board of Direct Taxes and Enforcement Directorate, which are expected to join the probe soon.

When contacted, Deepak Gupta, director, KCPL, denied that the company’s outlets had conducted any illegal sale. “The I-T department has visited us and we have given them all the necessary documents. We are honest and one of the highest tax-payers,” said Gupta.

However, official sources said that over the next few days after November 8, KCPL deposited nearly Rs 90 crore in old currency at three bank branches in Delhi, including one of Axis Bank.

Sources said that I-T sleuths were led to KCPL’s deposit while investigating various deposits at Axis Bank post-demonetisation. They said that investigators found that the company had allegedly not recorded its gold stock in account books at the Kucha Mahajani shop on the night of November 8.

Sources said that the Chandni Chowk outlet had recorded sales of just Rs 40 crore from April-September, of which less than Rs 4 crore was in cash. They said that investigators also found that the hard disks of CCTV cameras at the shop had allegedly been destroyed.

Responding to queries on these sales, KCPL’s Gupta said: “We are one of the largest gold dealers and refiners in India. We sell gold through RTGS and cash, depending on the market situation. On November 8, we got better prices in cash in comparison to RTGS, that’s why we achieved higher cash sales on that day in comparison to usual days… The sales were of imported material on which we had paid the appropriate Customs duty.”

RTGS stands for Real Time Gross Settlement of funds through banks, either individually or on an order-by-order basis.

Asked why the PAN numbers of buyers were not recorded, Gupta said: “On November 8, the sales were mostly of amounts below Rs 2 lakh. We have conducted the sales as per prevailing laws.”

About the bank deposits, Gupta said, “It was the legitimate cash in our Books of Accounts, which we deposited with banks in subsequent days.”

Incidentally, KCPL had won the India International Gold Convention’s Promising Bullion Refinery of the Year award for 2015-16 this August.

Sources said that the I-T department is looking at several such cash transactions that were recorded from across the country at various bullion traders and jewellers on the night of November 8.

On November 9, the Ministry of Finance, in a series of tweets on its official account, had quoted Revenue Secretary Hasmukh Adhia as saying: “A person buying jewelry has to give his PAN number; Instructions being issued to field authorities to check it with all jewelers… Action to be taken against those jewelers who fail to take PAN numbers from buyers to ensure this requirement is not compromised.” Adhia retweteed these tweets on his Twitter account the same day.

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