Income Tax Department has put several jewellers under scrutiny in cases of alleged large and disproportionate cash deposits during the demonetisation period in November 2016. Some jewellers have been found to have deposited nearly 1,000 times as much cash during the period as compared to the year-ago period.
Crux of the Matter
The IT department has scrutinised cases where taxpayers reported a massive increase in unsecured loans during the year or loans fully paid involving huge amounts. These jewellers have also not shown the cash deposited in their return of income for the year 2017-18.
These jewellers were red-flagged by the system as their cash deposits amounted to multiple times of their declared income of a few lakhs in previous years.
A Gujarat-based jeweller was found to have deposited cash of over Rs 4 crore during demonetisation against just over Rs 40,000 a year ago.
One jeweller with a declared annual income of 26 lakh claimed that he received nearly 10 crores in instalments days before demonetisation was announced.
The jewellers claimed that the cash deposits were part of sale proceeds or loan/cash received as an advance from unknown customers towards a purchase in October 2016. However, they have failed to furnish complete bills for such purchases.
Curiopedia
On 8 November 2016the Government of India announced the demonetization of all Rs 500 and Rs 1,000 banknotes of the Mahatma Gandhi Series. It also announced the issuance of new Rs 500 and Rs 2,000 banknotes in exchange for the demonetised banknotes. According to a 2018 report from the Reserve Bank of India, approximately 99.3% of the demonetised banknotes, or Rs 15.30 lakh crore (15.3 trillion) of the Rs 15.41 lakh crore that had been demonetised, were deposited with the banking system. The banknotes that were not deposited were only worth Rs 10,720 crores, leading analysts to state that the effort had failed to remove black money from the economy. More Info
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