New Delhi: After separatist leader Shabir Ahmad Shah was found to be running a hawala nexus for money laundering to support terror activities in the Valley, the income tax department carried out several search operations in Kashmir to crack such black money rackets. And guess what, they struck a goldmine. 

The income tax department said that they have cracked the nexus of local government officials, who connive with separatists to generate black money that passed under the tax radar.

The raids, which were carried out last Friday at five locations in and around Srinagar, revealed how two groups plotted with local officials to facilitate the absorption of undisclosed income of terror sympathisers and financiers in real estate — shops, buildings and land — in Srinagar.

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Hiding black money in real estate

The tax department unearthed that 76 shops built by government’s own department, the Srinagar Development Authority (SDA), for resettlement of vegetable and fruit vendors played a vital part in facilitating the functioning of the black money rackets. 

The shops were sold to influential and cash-rich disrupters at a huge premium.
While the department did not disclose the identity of these disruptors who funnelled money received in under-the-table cash transactions into terrorism, but a probe into one such person led IT sleuths to a mammoth magnitude of black money used in such real estate transactions.

The person was the self-proclaimed chairman of the Vegetable Vendors’ Union of Batamaloo. Batamaloo, the rehabilitation plan for which was announced in 2019 after an anti-encroachment drive, has now come to light in the wake of such murky cash transactions.  

Batamaloo is one of the hotbeds of stone pelting and terrorism, leading to several encounters by security forces

The income tax department found that four shops on the first floor of the market have apparently been sold by this person for Rs 1.09 crore to another individual, who paid Rs 9 lakh in cheque and the balance of Rs 1 crore in unaccounted cash.

This “local community leader” has also built a three-storeyed budget hotel-cum-shopping complex at the New Fruit Complex in Parimpora from the black money received from the sale of the shops and other real estates.

Unauthorised land illegally sold for black money

Meanwhile, a second search operation revealed that nearly 86 kanals of land (1 kanal = 4500 square feet) under unauthorised occupation was sold to locally powerful people at a high premium. The transactions have been carried out either completely or largely in undisclosed cash.
A number of original ‘ikrarnamas’, which show possession of land being passed on in exchange of unaccounted receipt of cash, have been found and seized.

Black money factory

The accused businessman from Srinagar not just hid his black money behind cash-based property transactions with the help of local government officials of the Srinagar Development Authority and other civic authorities, but also posed as an entrepreneur.

This tax evader also set up a scrap and plastic crushing unit with the ill-gotten money. 

The investment in this industrial unit, as well as income earned from it, has been totally kept out of the tax net of the country.

Overall, the search missions unearthed unaccounted financial transactions of over Rs 11 crore and undeclared investment in immovable property and assets of over Rs 19 crore. And this is just from in and around Srinagar.