Cash deposits at co-op society in city under scanner

Tax sleuths are investigating big cash deposits and loan repayments at Vasavi Credit Cooperative Society.

An official statement on Friday said they were verifying “such huge deposits after demonetisation.’’ Sleuths searched society premises from January 24 to 26.

With its head office at Malleswaram, Vasavi Co-operative Society runs four branches---at Sanjay Nagar, Moodalapalya, Nelamangala, and Gandhi Bazar.

“Preliminary investigations indicate that a substantial part of the deposits are from undisclosed sources,” the release said. It did not, however, give an exact figure.

The income tax department’s investigation wing seized several documents, and put the total deposits mobilised by the society, as on March 31, 2016, at Rs 200 crore.

Illegal operations
Tax sleuths said Vasavi Credit Co-operative Society was involved in banking operations although it was registered only as a society. Regulatory and enforcement agencies will look into the violations, the income tax department said.

The society was started in 1991 and has about 30,000 members. It was accepting deposits after enrolling individuals as members for a nominal fee. Subsequently, members could make time deposits, buy cash certificates, and operate savings accounts.

The society has not complied with statutory regulations: it has not collected PAN from account holders, or even deducted tax on interest paid, sleuths said.

The society had tied up with a nationalised bank to allow electronic fund transfers.
DH News Service

CEO under cloud
Sleuths said they had found evidence against the society’s CEO. He was running an unregistered chit-fund and finance business at the society with help from relatives, according to the I-T department.

Garib Yojana deal
The tax department said those with deposits at such societies could consider putting their money in the Pradhan Mantri Garib Kalyan Yojana to get immunity from tax, penalty and prosecution.