IT probing foreign banks, brokers in illegal investments case
New Delhi: The Income Tax department is probing a few foreign banks and financial brokers after it was tipped off about large scale illegal high returns investment programme being executed in violation of RBI guidelines.
The investments and returns scheme, called the Private Placement Programmes (PPP), is devised where an exceptional amount of returns are guaranteed within an extremely short tenure and the I-T is probing suspected tax evasion to the tune of Rs 800 crore during the last two years in this alleged tax crime.
According to sources privy to the development, the department was alerted about these schemes, being run by some private players and foreign banks, after economic intelligence agencies like the Central Economic Intelligence Bureau (CEIB) and others provided them with such inputs last year.
The PPP, according to RBI and tax laws, are not permitted in Indian economic channels and any investment returns programme can only be undertaken after obtaining due clearance from these agencies.
"A probe is underway. The names and identities of the case cannot be disclosed at present as the department is gathering evidence," they said.
In a typical PPP, sources said, brokers offer as much as 200-300 per cent returns to a bank account holder over a short period of time through pledging of Fixed Deposits (FDs) and the resulting amount is utilised in some other high return investment avenue by the operator.
The FDs used in this scheme are worth crores and the conniving banks then issue letters of credit to the account holder and route the cash or FDs to be used for any other investments purpose, thereby skirting the legal requirements of reporting the assets on records.
The department which was given the data by snoop agencies from late 2010 has begun an exhaustive probe of all the suspicious and cash transaction reports it had received on these banks and financial intermediaries since then.
The department, according to sources, will soon begin the process of assessment in these cases and investigate the role of the people involved and also the end use of the profits generated through this scheme.