Bengaluru raids yield Rs5.7 crore in new notes, luxury goods

03 December 2016

Bengaluru-based government engineers Jayachandra and T N Chikkarayappa earned not more than Rs10 lakh a year each. Yet raids by income tax officials on Thursday revealed the jaw-dropping extras they had acquired - a Lamborghini, a Volvo, a boat - MV Agusta, a Ducati 749 motorcycle, multiple luxury apartments, gold and Rs5.7 crore in brand new Rs2,000 notes.

The seizures from the officials and two contractors in Bengaluru are the biggest haul of new cash since Rs500 and Rs1,000 notes were demonetised on 8 November in a move to choke tax evaders. Around Rs90 lakh in old notes and 16 kg of gold and jewellery worth Rs5 crore were also found.

Stacks of new notes on a bed made an unusual sight amid a severe shortage in banks.

Jayachandra is the chief project officer of the state highway development body and Chikkarayappa is the managing director of a civic body in charge of harnessing the waters of River Cauvery.

The officials have admitted to having around Rs152 crore in unaccounted wealth. Sources in the Income Tax Department believe the final tally could be far more.

The engineers were suspended on Friday, on a day the government warned that those trying to convert their illegal, untaxed money would be punished and coordinated action is under way.

"Trails are being pursued by agencies. The result is already visible. It will be more visible in the coming days," said economic affairs secretary Shaktikanta Das.

Sources in the Income tax department said investigations are focused on how the Bengaluru officials managed to obtain so many new notes at a time they are in short supply and are being rationed by banks and ATMs.

At least one bank official's involvement is suspected, said sources. The manager of a cooperative bank is suspected to have helped the officials with new notes for a commission.

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