The Income Tax department has detected more than 200 shell companies operating in Delhi, Karnataka, Rajasthan, Gujarat, Maharashtra and Punjab besides Uttar Pradesh that have been used to convert illegal money into “legal” in the last two months, sources said.
The department will examine the pattern of revenue streams of these companies to understand the nexus between such entities and the beneficiaries who used them to engage in alleged money laundering.
Delhi-based lawyer Rohit Tandon, who was allegedly involved in money laundering, too floated his own shell company to convert part of his illegal cash into white money, the source added. Tandon was earlier arrested by the enforcement directorate.
The department is also fleshing out names and business details of the newly floated small firms. The department is also closely monitoring the accounts and cash flow of all the “new firms” that have been floated in the last couple of months to ensure that they are not being used convert black money.
“Investigations are under-way and we will ensure that these cases are resolved at the earliest..we have come across a large number of shell companies that have been used to layer the transactions that are suspicious,” the source told Hindustan Times.
Earlier, an HT investigation revealed that out of 10.26-lakh entities with the Registrar of Companies (RoC), 133,256 were just’ drop box’ companies in Kolkata and Delhi alone. There were many such shell companies.
While the Income Tax department has already sought details of all suspicious transactions from both public and private sector banks besides the accounts have received Rs 2 lakh and above, it is looking into the accounts of all the defunct companies that have suddenly reported surge in business deals.
“Dormant companies, investment companies and pass-through investment companies who may not be having any fixed revenue streams may have been used to make cash deposits apart from alleged over invoicing by companies engaged in jewelry business,” Manoj Kumar, legal expert and managing partner, Hammurabi and Solomon, said. “The data sought by the income tax department from banks should help in this drive to detect money laundering during demonetisation.”
The source indicated that the IT department will undertake further investigations to examine the issue.
“There are many more such companies that have been opened in the recent past and we are examining their accounts,” the source said.