Government blocks top shell firm accounts: Reason- Huge money-laundering after notes ban

New Delhi, October 6: Some of the top offender’s companies bank accounts were blocked last month by the government for illegal transactions and tax evasion was one that had more than 2000 bank accounts, for making it tough for tax officials to track transactions.

Earlier in last month, the Finance Ministry froze the accounts of two lakh shell companies which believes no active business operation or activities, approximately 13 banks have shared early information with the government on some of the dodgy companies. with one had 2134 accounts another had 900 in its name and plenty had at least 100.

According to the reports says that the information supplied so far is the first installment of what banks are expected to survey and is related to about 5,000 of the two lakh blacklisted companies.

Data shows that between demonetization being announced on November 8 and when they were identified in July as fronts, these 5,000 firms collective deposited about 4,570 crores and withdraw nearly the same amount in which suggests vast money laundering.

Many companies with multiple accounts showed a tiny balance on November 8 but after Prime Minister Narendra Modi’s shock decision to outlaw high-denomination notes,

Some of the firms deposited and withdrew substantial tranches of money after which they returned to dormant accounts with no activity.

In one bank, more than 3,000 companies with an abnormally high amount of bank accounts were identified. in which that have a cumulative balance of about 13 crores on November 8, 2016, after demonetization was called these companies deposited and withdrew about 3,800 crores, leaving a negative cumulative balance of almost Rs. 200 crore at the time of freezing of their accounts.

Otax expert suggested that this shows reports unreported and untaxed income was converted into white money and
to be re-emphasized that this data is only about 2.5% and the total number of suspected shell companies that have been struck off by the government.

Finance Ministry officials believe that further mining of data will unearth thousands of other such tax evaders.