Income Tax raids in NCR unearths lawyer's huge unaccounted cash, property investments
The Income Tax Department has said that its search and seizure action across Delhi, NCR and Haryana in the case of a leading advocate practicing in the field of commercial arbitration and alternate dispute resolution has led to findings of unaccounted cash and huge investments in posh properties.
 
An official statement, wherein the Finance Ministry did not mention the name of the advocate, said that the search was conducted in 38 premises spread over Delhi, NCR and Haryana on Wednesday.
 
It noted that the advocate was suspected to be receiving substantial amounts in cash from his clients to settle their disputes.
 
"In one case, the assessee had received Rs 117 crore from a client in cash, whereas he had shown only Rs 21 crore in his records, which was received through cheque. In another case, he received more than Rs 100 crore in cash from an infrastructure and engineering company for its arbitration proceedings with a public sector company," it said.
 
As per the IT Department, the unaccounted cash received was invested by the assessee in purchase of residential and commercial properties and in taking over of trusts engaged in running of schools.
 
"Evidences recovered indicate investment of more than Rs 100 crore in cash in several properties in posh areas in the last two years. The assessee and his associates have also purchased several schools and properties, for which more than Rs 100 crore was paid in cash. He has also taken accommodation entries worth several crores," said the statement.
 
During the search, cash worth Rs 5.5 crore has been seized, while 10 lockers have been placed under restraint.
 
Incriminating documents of unaccounted cash transactions and investments made by the assessee over several years have been found, as per the ministry's statement.
 
Substantial digital data reflecting unaccounted transactions of the assessee and his associates, who are financers and builders, has also been recovered, it added.
 
The department said that further investigations are in progress.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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    Remittances To Hit Rough Patch in FY on COVID-19 Worries: Report
    Muted external remittances growth is more of a structural issue than transitory and it would further weaken aggregate consumption demand, though the impact will be restricted to a few states, given their skewed shares in foreign remittances, says India Ratings and Research (Ind-Ra). 
     
    Historically, India has remained the largest receiver of remittances in the world. However, the share of remittances as a percentage of gross disposable income receded to 2.5% in FY18-19 from 3.5% in FY09-10. The growth rate in four different periods shown below suggests that the flows had started to moderate even before the outbreak of COVID-19, the ratings agency says.
     
     
    Various empirical studies have suggested that remittances are an important driver of a smooth consumption cycle. Thus, countries with large dependence on remittances act as a counter cyclical buffer against a fall in domestic output. Additionally, remittances have a positive impact on household savings and act as a consumption booster. Therefore, the ratings agency feels that the pandemic-led slowdown in consumption is likely to get exacerbated by the muted remittance flows. 
     
    The falling oil prices and recessionary pressures that exacerbated due to the COVID-19 outbreak have led to job losses and salary cuts globally, it added. 
     
    According to World Bank, Indian diaspora constitutes close to 16 million people around the world, of this, 55% are situated in Gulf Cooperation Council. Furthermore, remittances from the region constitute 54% of the total remittances to India. 
     
    According to the Bank, global remittances are projected to decline by 20% yoy in 2020 due to the economic crisis induced by COVID-19 pandemic.
     
    Interestingly, the NRI (non-resident Indian) accounts excluding FCNR (foreign currency non-resident) account have seen positive growth, owing to higher savings by NRIs due to COVID-19 related uncertainty.
     
     
    On the macro front, a considerable flow of remittances directly impacts aggregate demand and thus the banking sector deposits. Meanwhile, banks with a higher NRI deposit ratio in the total portfolio will be better able to hedge their risk than others, as the overall banking sector deposits are stable along with muted credit offtake.
     
    According to Ind-Ra, FCNR has witnessed a year-on-year (y-o-y) fall in deposits, whereas overall NRI accounts have reported an increase. However, in Ind-Ra’s rated portfolio, The Federal Bank Ltd and The South Indian Bank Ltd have reported subdued growth in NRI deposits. 
     
    The ratings agency opines that the key risk for banks will only emerge if the fall in deposits will continue amid an increase in withdrawals due to the factors induced by the pandemic. At the same time, it says, banks will be able to manage this risk better with the help of improved domestic deposits amid muted credit growth. 
     
    Ind-Ra says it believes that in spite of the muted external remittances, the impact would largely be restricted to the aggregate consumption level in the first order and the buoyancy in foreign capital flows would compensate the requirement of capital. 
     
    According to the ratings agency, there are multiple dynamics of sending remittances, starting from the pattern of migration, taxation, cost of remittances to comparative return between host and home countries and all these factors are structural enablers for remittances, whereas income generation is the largest driver. 
     
    "Remittances are not closely linked to capital flows because it is a transfer of income to home destination. Therefore, the motivation is less of speculation, and remittances have remained more of a stable source. The cyclicity of remittances have largely been dependant on the country of origination of remittances. In the case of India, Gulf countries are the largest source of remittances, thus oil price has been recognised as the major driver for quantum of flows. Additionally, geopolitical conditions play a critical role," Ind-Ra added. 
     
    India receives its major remittances from the Gulf Cooperation Council (GCC) nations which have stagnated since 2015 due to volatile oil prices in global markets. The economic growth of the region depends heavily on oil prices. The remittances from the region will be further pressured due to COVID-19 related factors coupled with falling oil prices, Ind-Ra says.
     
     
    The NRIs, besides sending money back home, also avail bank facilities to park their funds as deposits in Indian banks to avail the benefit of high interest rates. Owing to the deteriorating macro variables of host countries, there has been a slight fall in the overall NRI deposits. The ratings agency opines that FCNR deposits will continue to witness a muted flow in FY20-21.
     
     
    Ind-Ra says it has assessed NRI deposits in its rated portfolio to check the vulnerability of its rated issuers. The NRE (non-resident external) account of Federal Bank constitutes 40% of its total deposits whereas 30% of the total deposits of South Indian Bank are dependent upon NRI accounts. Both the banks have reported a rise in their NRE accounts and NRI accounts, respectively. 
     
     
     
    "The major cause behind the heightened deposits, despite falling remittances, is more savings amid the COVID-19 crisis, along with favourable interest rates. The banks have proved a stable deposit ratio like during the previous crisis such as the 2008-2009 global financial crisis. The banks will be able to manage this risk with stable deposit growth coupled with muted credit offtake. However, in case the inflows continue to slacken, increased withdrawals will heighten risks," the ratings agency concludes.
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    NCLAT sets aside plea against CarVal's resolution plan for Uttam Value Steel
    The National Company Law Appellate Tribunal (NCLAT) has given its go ahead for the resolution plan of New York-based CarVal Investors' to acquire the debt-ridden Uttam Value Steels Ltd.
     
    The appellate tribunal in a judgment on Wednesday set aside a plea challenging the order by National Company Law Tribunal's (NCLT) Principle Bench approving the resolution plan.
     
    The company has a total admitted debt of Rs 3,003 crore.
     
    The appellate tribunal noted that the appellants are aggrieved with the allocation of a "tiny" amount of 0.18 per cent of the outstanding dues.
     
    The collective admitted operational debt of the appellant was Rs 423.82 crore which was 80.88 per cent of the total operational debt of the corporate debtor total being Rs 524 crore. The appellant was also representative of the operational creditor in the meeting of CoC, being holder of more than 10 per cent of the total admitted debt of Rs 3,003 crore.
     
    Five operational creditors moved the NCLAT post the NCLT's approval to the plan alleging that the adjudicating authority has approved the resolution plan, where the appellant is getting hardly 0.18 per cent or 0.19 per cent of its claims. The appellant is logically upset that they are paid 0.19 per cent whereas the Financial Creditors (CoC decision takers) are getting 41.75 per cent of their claims.
     
    The figure cited by the Operational Creditor, that the Financial Creditor have got Rs 1,035 crore from an admitted debt of Rs 2,479 crore (41.75 per cent)
     
    The three-judge bench said that the issue of prior approval from the Competition Commission of India (CCI) under the Insolvency and Bankruptcy Code, 2016 is incorrect and CCI approval is not a condition precedent for the approval of the resolution plan.
     
    "The CCI approval has been procured on June 4, 2019 in compliance with the provisions of the Code. It is submitted that condition requiring CCI Approval is 'directory' and having obtained the same, the provisions Section 31(4) have been complied with," the order said.
     
    After several observations, the NCLAT bench said: "We find that there is no merit in this Appeal and the Appeal is hereby dismissed. Pending IA, if any, are disposed of in terms of above observations and directions. Interim orders, if any, stand vacated. There shall be no order as to costs"
     
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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    COMMENTS

    saharaaj

    2 weeks ago

    WHy can't appellate impose deterrent fine on such litigants filibusters obstructionists or they love to show out put based on work done such interlopers

    shailendra.dukane

    2 weeks ago

    Finally, What share holder will get who are since years. Over 25 years of investment is dead. Will this recover at any point.

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