NE NEWS SERVICE
NEW DELHI, DEC 17
The Income-Tax Department raided four Asset Reconstruction Companies (ARCs) and found cash transactions of Rs 850 crore in one such company. The raids were carried out at 60 premises spread across Mumbai, Ahmedabad, and Delhi.
The probe revealed that these ARCs had adopted various unfair and fraudulent trade practices in acquiring the Non-Performing Assets (NPAs) from the lender banks.
“It has been found that an unholy nexus existed between the borrower groups and ARCs, and in the process, a maze of shell/dummy concerns has been used. The amount at which the NPA has been acquired by the ARC has been found to be far less than the real value of the collateral securities covering the said asset/NPA,” the department said in a release.
The investigation revealed that the minimum cash payout made by the ARCs to the lender bank(s) for acquiring the stressed assets/NPAs was typically funded by the borrower group’s funds.
“Such funds have been routed through several layers of dummy companies controlled by the borrower group or through hawala channels.”
“It has also been found that the ARCs have been following non-transparent methods in the disposal of assets that were acquired by them from the banks. More often than not, the underlying assets have been re-acquired by the same borrower group, albeit at a fraction of their real values,” the release added.
The I-T probe found out that the ARCs had allegedly concealed the profits on the disposal of the underlying assets by diverting the actual profit to their related concerns, under the garb of consultancy receipts or unsecured loans/investments.
“Through this method, the ARCs have not only evaded the payment of due taxes but also deprived the lender banks(s) of their share of actual profits,” the department said.
One of the ARCs was reportedly found to be maintaining a parallel set of accounts on Tally accounting software on a pen drive, recovered from the custody of the trusted employees of the promoter.
The department added that “this parallel set of accounts contained cash transactions aggregating more than Rs 850 crore.”
Handwritten diaries have also been found during the search, containing detailed entries substantiating the deliberate act of layering of transactions by the promoter group and the use of a network of middlemen for the same. There is also evidence of the routing of funds through offshore structures to acquire the assets, the I-T Dept said.
During the search, Rs 4 crore was also seized. “Large volumes of documentary and digital evidence seized are being further analysed for detection of violations under the Income Tax and allied Acts,” it said.
