Multi-Starrer Tax Evasion Thriller Stumps I-T Dept 

Diamond houses, local traders, realtors and petty assistants come together to evade tax 

When officials of the Mumbai income-tax investigation wing stumbled upon a handful of bank accounts with wild entries, they first thought these were typical money-laundering deals one associates with the seedy underbelly of the financial capital.But as they dug deeper into the money flow,they could slowly piece together an amazing web of transactions that involved diamond houses, construction firms,local traders and an army of lackeys who do nothing other than lending their names for small money. These disparate players come together in circuitous transactions that are carried out to escape tax as well as funnel unaccounted cash into audited accounts of regular businesses.It took us a while to get the complete pictureWe have our eyes on some people. The investigation is on, said a senior official of the Income-Tax Department.The chain starts with some diamond firms that regularly import rough stones on 3-6 months credit.But the simple trade is done differently. The import lands in five consignments : on paper, only one of these is linked to the diamond houses.
The Tax Maze 

The Players 

What They Do 

Diamond Houses 
Route bulk of imports through assistants who front for them.This helps them lower turnover & evade tax in future 

Assistants 
Import on behalf of diamantaires for a small fee.Provide fake purchase bills to local traders,who need them to regularise their books 

Local Traders 
Give cheques to the assistants in return for purchase bills.They get back their money from the assistants in cash 

Realtors 
Convert black money into white through multi-layered transactions with local traders and the assistants

Economic Times, New Delhi, 12-04-2013