Income Tax dept raids Chinese individuals, local contacts in Rs 1,000-crore money laundering case

It said the “subsidiary of Chinese company and its related concerns have taken over Rs 100 crore bogus advances from shell entities for opening businesses of retail showrooms in India”.

The Income Tax Department has conducted raids against some Chinese individuals and their local associates for allegedly indulging in a money laundering racket involving Rs 1,000 crore using shell or dubious firms, the CBDT said on Tuesday. It said the “subsidiary of Chinese company and its related concerns have taken over Rs 100 crore bogus advances from shell entities for opening businesses of retail showrooms in India”.

The Central Board of Direct Taxes (CBDT), that frames policy for the tax department, 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.

Some bank officials were also raided, it 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 Rs 1,000 crore over the period,” it 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.