Spice trader raid: I-T dept may invoke benami law

Nagpur: Income tax department is gearing up to declare the unclaimed assets found in private lockers run on city spice trader Prakash Wadhwani’s premises as benami properties, if the claimants do not turn up within a week.
Wadhwani, who is a prominent businessman from the city dealing in spices’ exports, has come under the taxman’s scanner. The action comes after Telangana police recovered Rs10 crore cash from a car near Adilabad, over 180km from the city. The cash was taken from one of the lockers in the vault located at Maskasath locality.

Sources say the vault run on Wadhwani’s premises had over 100 lockers. The department has summoned each of the persons in whose names the lockers have been allotted.

It has been nearly a fortnight since the action began, but as much as 50 allottees have not responded to income tax’s notices. Even in other cases, it has been found that lockers largely had cash stored in it. The lockers were allotted to local businessmen who kept the cash needed for day-to-day requirement in the private lockers.

In majority of the cases where the persons responded to the notices, it has been found that the funds have been accounted for as cash in hand in their books of accounts. The average funds in each locker was below Rs10 lakh, said sources.

“However, the bigger concern is related to the lockers in which the allottees have not turned up despite the notices. The department may wait for a couple of days or so after which action under the benami laws will be taken up,” said a source privy to the development.

The cash haul case is being considered to be one of the high profile cases of the region. The issue of private lockers was raised in one of the inter-agency meets held over a couple of months ago. It was flagged out that there are 6 to 7 such private lockers operating in the city which are suspected to be acting as conduit for unaccounted money, said a source.

In this case, the cash was meant to be delivered to a beetle nut trader — Uday Shetty in Karnataka. The cash was taken out from the vault but it has not been ascertained from whose locker did it come from. The car driver apprehended by the police said he was only instructed to ask the manager to get him the cash meant for Uday Shetty. As the locker was operated, the driver waited outside, he had said during the interrogation. Even Shetty is learnt to have not turned up before the income tax authorities.

No regulatory authority to monitor locker biz

Financial intelligence agencies have reports that there are around 6-7 private lockers in the city. Sources say that running a private locker does not need any approval. This is because there is no regulatory authority which specifically deals with locker business. So, the common practice is to just get gumasta licence under the Shops and Establishment Act and start the business. This is just like renting a premises. Even in this case, the locker was only run on Wadhwani’s premises but the business was operated in someone else’s name.