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Arrested dealer may have to pay Rs 483-crore fine for Rs 97-crore demonetised notes

With a law passed in Parliament early last year, possession of more than 10 pieces of the old notes by individuals and more than 25 pieces for study, research or numismatics is a criminal offence, attracting a fine of Rs 10,000 or five times the cash held, whichever is higher.

india Updated: Jan 19, 2018 16:03 IST
Haidar Naqvi
Haidar Naqvi
Hindustan Times, Kanpur
Rs 100 crore,Demonetised notes,Kanpur
A case has been registered by the UP police against Khatri under sections of the Indian Penal Code and the Specified Bank Notes (Cessation of Liabilities) Act, 2017, for keeping demonetised notes over the permitted limit in his possession.

Anand Khatri, the businessman from whose house demonetised notes worth Rs 96.62 crore were seized in Kanpur’s Swaroop Nagar locality on Tuesday, may end up paying almost Rs 483 crore as a fine.

A case has been registered by the UP police against Khatri under sections of the Indian Penal Code and the Specified Bank Notes (Cessation of Liabilities) Act, 2017, for keeping demonetised notes over the permitted limit in his possession.

“Keeping the demonetised notes is punishable by a fine, which may extend to five times the amount recovered,” said Vivek Khanna, former chairman, Central India Regional Council of Chartered Accountants. In Khatri’s case, this translates to about Rs 483.1 crore if the police choose to enforce the penal provisions and he is found guilty.

Read: Where to stash Rs 100 cr? Cops ponder after haul of demonetised notes in Kanpur

With a law passed in Parliament early last year, possession of more than 10 pieces of the old notes by individuals and more than 25 pieces for study, research or numismatics is a criminal offence, attracting a fine of Rs 10,000 or five times the cash held, whichever is higher.

IG Kanpur Zone Alok Singh said the police are looking into it. It is a procedural matter and the first one its kind, he said. An income tax department official said it will help the police in building a foolproof case against Khatri and others. Since the police have fled the case under sections of the IPC and SBN Act, it would have to initiate the proceedings for the recovery of the fine through a process that involves property attachment, the official said

Since the authorities found the demonetized notes from the house that Khatri officially owns, the money will be treated as belonging to him, the official said. Khatri, when questioned, has said that part of the Rs 96.62 crore found in his house was his but the rest belonged to others.

“The people he names will be questioned about their shares. Let us see, if they admit. If they do not, Khatri will have to pay the fine,” said the I-T official.

Read: Hyderabad, Kolkata, Varanasi businessmen arrested

Meanwhile, I-T department officials carried out searches for the second day on premises owned by Khatri and his family, who primarily dealt in real estate. Documents of 40 properties and Rs 3 lakh cash was found in one of the offices. Another team is matching the stock at one of his showrooms and questioning two of his brothers in Nayagunj.

Most of the property documents found were in the name of others.

“We will be sending the documents to the Benami wing; it will summon the people in whose names the properties are listed for questioning,” said the I-T official.

The I-T and police departments plan to question Khatri again after getting his custody. He was sent to judicial custody early Thursday morning.

First Published: Jan 18, 2018 21:53 IST