Seized currency was business income, says Income Tax Dept.

Removal from TTD Board was an injustice, says industrialist Sekar Reddy

June 21, 2019 07:51 am | Updated 07:51 am IST - CHENNAI

Legal income:  The Income Tax Department said that the cash seized came from the proceeds of sand sales by SRS Mining, in which Sekar Reddy has a stake

Legal income: The Income Tax Department said that the cash seized came from the proceeds of sand sales by SRS Mining, in which Sekar Reddy has a stake

In a twist to the case involving the seizure of ₹33.89 crore in new ₹2,000 denomination notes from the business premises of J. Sekar, alias Sekar Reddy, on December 8, 2016, the Income Tax Department has concluded that the money was proceeds from the sale of sand by his firm M/s SRS Mining.

The finding goes against the allegation of central agencies that Mr. Reddy and his partners had indulged in money laundering to source the new currency notes with the help of bank officials.

Replying to a query from Mr. Reddy, the IT Department has said: “As per the seized documents, the source of new currencies seized is from proceeds of sand sales by M/s SRS Mining.”

Of the three cases booked by the CBI, two were quashed by the Madras High Court last year. The adjudicating authority for Prevention of Money Laundering Act (PMLA) cases had also vacated the attachment of immovable assets by the Enforcement Directorate, stating that the property was not involved in money laundering.

When contacted, Mr. Reddy told The Hindu on Thursday that the findings of the IT Department vindicated his stand. “It has been clearly stated that our firm paid advance tax to the tune of ₹31 crore even before the raid. Since the details of the money seized were already entered in the book of accounts, the question of unaccounted money does not arise,” he said.

“What hurts me is the way the then Andhra Pradesh government hastily removed me from the post of Member, Tirumala Tirupathi Devasthanams (TTD) Board, even without seeking my explanation,” he said.

The Andhra Pradesh government had issued an order removing Mr. Reddy from the TTD Board stating that he was found to be in possession of ₹100 crore in cash and a huge quantity of gold during a CBI raid on December 11, 2016. “But the fact is that the CBI search came many days later and there was no such seizure at all. The IT Department seized only ₹12 lakh from my residence and the rest of the money belongs to the company, which was duly accounted for,” Mr. Reddy said.

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