Cash deposits by Mumbai bullion dealers alerted taxmen

Four Mumbai-based bullion dealers drew the attention of tax authorities after they deposited huge amounts of scrapped cash in banks after demonetisation on November 8. The amounts of cash deposited were much higher than what they had done in the preceding two-three years, an IT official told ET. “We have acted on specific information of sales on November 8 and bank deposits by the four dealers,“ said a tax official. “The survey is being conducted by the investigative wing at Scindia House in light of the huge cash deposits after demonetisation. The cash deposits were higher than any in the past two to three years."

Asked if the surveys could be converted into raids, the official said “that depends on what we find .“

ET first reported about the surveys in its edition of December 30.The survey will continue for the next few days, said the tax sources.

Tax sources suspect that buyers with unaccounted funds held in scrapped `500 and `1,000 notes purchased gold at huge premiums from the four. These were then deposited by the dealers in banks.The sales were split below `2 lakh each on bills which is why the PAN details of buyers were not given thereon.