The Income Tax Department has conducted raids against some Chinese individuals and their local associates for allegedly running an estimated ₹1,000 crore worth money laundering racket using shell or dubious firms, the CBDT said Tuesday (Aug 12).
The department raided at least two dozen premises in Delhi, Gurgaon and Ghaziabad as part of the action under which it covered the Chinese, some of their Indian associates and bank officials, the Central Board of Direct Taxes said in a statement issued here late night.
The CBDT is the policy-making body for the tax department.
It said the “subsidiary of Chinese company and its related concerns have taken over ₹100 crore bogus advances from shell entities for opening businesses of retail showrooms in India”.
The CBDT said the searches were launched based on “credible inputs that a few Chinese individuals and their Indian associates were involved in money laundering and hawala transactions through a series of shell entities.”
A Chinese man, who allegedly holds a fake Indian passport, is alleged to be the kingpin of the racket apart from few other nationals of that country. They said the Chinese man had got prepared the fake Indian passport from Manipur and has been detained by the department as searches are continuing.
The tax officials have shared the information of alleged possession of fake Indian passport with police authorities who are expected to book him for violation of the Passport Act. The police may later arrest him and even the Enforcement Directorate may take over the case for investigation under the criminal provisions of the Prevention of Money Laundering Act, they said. “Search action revealed that at the behest of Chinese individuals, more than 40 bank accounts were created in various dummy entities, entering into credits of more than ₹1,000 crore over the period,” the CBDT said in a statement without identifying the entities involved.
“Incriminating documents of hawala transactions and money laundering with active involvement of bank employees and Chartered Accountants have been found as a result of the search action,” it said.
Evidences of foreign hawala transactions involving Hong Kong and US dollars have also been unearthed, the CBDT said.
India recently banned 59 Chinese apps in the aftermath of a continuing standoff between the militaries of the two countries in Ladakh.