Demonetization Crackdown: IT Department Targets Cash Deposits in Corporate Accounts

In ongoing demonetization crackdown; Investigating Agencies sent notices to many business houses and cash depositors. The phenomenon has been repeated for the second time after it was done in January 2017. Here are the details of the story.

Target on Business Firms that deposited large Sum of Money

Income Tax Department has now targeted business firms after it first targeted individuals who deposited large sum of cash during demonetization period. The department has sought a detailed explanation from the firms and individuals about the source of money that was deposited. The general response given by the business firms are that the money mostly belongs to business but now the IT department has asked for a detailed explanation on the source of money. Individuals and businesses who revised their income tax return after demonetization period are also being questioned.

The notice was sent through email to the firms concerned who are mostly jewelers, entrepreneurs, textile merchants, diamond traders and real estate developers. It is said that the government is behind ‘Big Fish’ this time. There are set of questions that are asked including the source of income, details of the customer to whom the goods are sold, bank transaction details and many other details have been asked.

Comprehensive Analysis followed by Investigation

It is reported that around 1 lakh notices have been sent to various firms and individuals who have suspected amounts deposited during demonetization row. IT department is keen to know about the whereabouts of such income and sources of income. The first phase of notice was sent in January this year where individuals who have deposited more than 1 crore of cash were questioned and investigated.

Near about 5000 notices were sent that time but now it has crossed more than 1 lakh after thorough research by the department. The department has not only questioned unexplained money but has now also questioned the details of customers to whom the goods were sold. Details of customers including their account details, PAN, Names and addresses have been sought by the department.

It would be interesting to see where this investigation heads as there are many cases where something fishy has been reported.