The Central Board of Direct Taxes (CBDT) said a search operation was conducted on a business group which led to the seizure of unaccounted jewellery and undisclosed cash of more than Rs 1.28 crore from the promoter of the group, in connection with the Jammu and Kashmir Bank case.
In a statement, CBDT stated that the organisation has been actively pursuing leads found in the actions taken against J & K Bank and its erstwhile Chairman, Parvez Ahmad.
"In another such follow-up action, a search and seizure operation has been conducted on a group that is in the business of providing security to business establishments and prominent individuals, as well as in running hotels in Jammu and Kashmir and other parts of the country," CBDT stated without mentioning the name of the group.
It further stated that the searched group also held a controlling share in a medical college in Punjab, which was apparently ordered to be closed by the Medical Council of India in 2014.
"The allegations against the group include defrauding the public sector banks including J & K Bank in connivance with the bank officials, unexplained cash deposits in the group entities and large scale diversion of funds taken for development of the impugned medical college as well as hotels of the group for private gain of the promoters," the statement read.
The search operation further revealed apparent siphoning of loans obtained from various public sector banks of more than Rs 74 crore, CBDT stated.
"Digital and documentary evidence found during search also clearly reflect machinations of the bank officials in violating prudence norms as well as rules of business to safeguard the banks' interest in grant of loans that exceed Rs 200 crore. These loans have subsequently become NPAs."
"The search action has revealed concrete leads of round-tripping of more than Rs 125 crore by the promoters of the group. The money trail of round-tripping suggests use of suspect entities, which have served as a conduit to bring back Rs 125 crore as unsecured loans in the hands of the promoter family and its close associates," the statement added.
The search team also found evidence of dummy manpower expenses.
"A large number of cheques issued to fictitious persons, who were supposedly on the rolls of the group for providing security to businesses and prominent individuals, were found with the main promoter. Prima facie, dummy persons have been shown as employees to inflate the expenses of the security business undertaken by the group at various locations in the country," the statement said.
CBDT said the main promoter and his family were the managing and controlling trustees of an educational society that ran the now-closed medical college in Punjab.
"Three batches of students were admitted in the medical college and fee, inclusive of capitation charges were paid by these students. However, no tax return was ever filed by the society and the evidence gathered in the search strongly suggests that the impugned educational society also violated other regulatory laws.
It is clear that the money collected from students as well as bank loans that were supposedly utilized for building infrastructure of medical college, which was actually never built or constructed has been siphoned off by the main promoter and his family for personal enrichment," the statement said.