Missing Rs 3.5 crore resurfaces, likely to give clues into money laundering in Northeast

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Rs 3.5 crore
Rs 3.5 crore

Missing Rs 3.5 crore resurfaces, likely to give clues into money laundering in Northeast

Rs 3.5 crore : It is suspected that black money owners are using the tax exemption status of the Naga tribes to convert the old currency notes into new ones.

At least two chartered planes from Hisar have landed in Nagaland’s Dimapur within a span of one week, raising suspicions that black money owners are using the tax exemption status of the Naga tribes to convert the old currency notes into new ones.

The Central Industrial Security Force on Tuesday apprehended Amarjeet Kumar Singh, a businessman, from Munger (Bihar) who carried Rs 3.5 crore of demonetised currency in a chartered jet.

It was reported that the cash had disappeared. But the cash that disappeared from Dimapur after being flown in by a chartered flight resurfaced on Wednesday, in an equally dramatic manner.

The cash, all in scrapped Rs 500 and Rs 1,000 bank notes, is legitimate, certified by the income-tax department and has been handed over to the owner – Anato Zhimomi, a Naga businessman.

Director General of Nagaland Police, LL Dungell said, “A local businessman, Anato Zhimomi has produced income tax exemption certificate and claimed that the money belonged to him. The businessman being a tribal is entitled to exemption. Income tax officials after detailed investigation handed over the cash to him.”

Zhimom is the son-in-law of former chief minister and Lok Sabha MP Neiphiu Rio of Naga People’s Front, an ally of the BJP. According to sources, Zhimomi had given the money to one Amarjeet Singh, a businessman from Bihar, to buy farm land in Haryana. The deal didn’t materialise and the money was returned.

The income tax and intelligence officials suspect that the Rs 3.5 crore in scrapped currency notes seized from a chartered flight in Nagaland could be part of a big money laundering racket, with the masterminds exploiting tax exemptions for tribals in the northeast. The IT deparment zonal office in Guwahati has sent a team to probe the matter and cross check Zhimom’s bank details. Zhimom is a businessman who has several business interests in Nagaland.

Last week, too, a chartered jet had landed in Dimapur from Hisar. Haryana police and Hisar aerodrome officials said it is for the Director General of Civil Aviation (DGCA) to check luggage of people hiring chartered planes.

INCOME TAX EXEMPTION TO TRIBES

Nagas, like all resident tribes of the sixth schedule areas of the Northeast, are exempted from paying the income tax.

The tribals of five Northeastern states – Tripura, Manipur, Mizoram, Nagaland and Arunachal Pradesh – are fully exempted from tax under Section 10 (26) of the Income Tax Act, 1961. Tribals within areas of district councils constituted under sixth schedule of the Constitution are also free from tax liability.

They are entitled to claim exemption from tax in respect of income from any source, arising therein and income by way of dividend or interest on securities.

or availing this exemption, the person must satisfy both of the following two conditions:

  1. He must be a member of Schedule Tribe as defined by Article 366(25) of the Constitution of India and,
  2. He should be residing in any area in the states of Nagaland, Manipur, Tripura, Arunachal Pradesh, Mizoram or districts of North Cachar Hills, Mikir Hills, Khasi Hills, Jaintia Hills and Garo Hills or in the Ladakh region of the state of Jammu and Kashmir. When a tribal starts residing at some other place for any reason, including transfer of employment, he loses the exemption.

A similar exemption is available to all those defined as “Sikkimese” in the IT Act. This again is for any income generated from Sikkim itself and for income from dividend or interest on securities generated anywhere. The objective behind these exemptions is to provide fiscal concessions to backward areas and communities.

MODUS OPERANDI

In times like now, it is this exemption that is apparently being misused to covert black money into white money. The modus operandi is very simple. Contractors and businessmen from outside the Northeast region routinely use accounts of tribals to conduct their business. Contracts are drawn up in the name of a local in exchange for a certain commission and the outsider businessmen is able to launder his money in the name of local businessmen.

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