ENFORCEMENT DIRECTORATE CONDUCTS SEARCHES ON CAs,COMPANY SECRETARIES AND OTHER TAX PROFESSIONAL IN CONNECTION WITH AN OPERATION TO UNEARTH BLACK MONEY BEING GENERATED USING SHELL COMPANIES..

The Economic times April 12-2017

Officials said the Enforcement Directorate teams searched premises of these professionals in Karol Bagh, Laxmi Nagar, Model Town, Azadpur, Dilshad Garden and few other areas as part of their probe in the generation of alleged stash funds to the tune of thousands of crores.  

They said the agency is carrying out the raids as part of its mandate to check money laundering and hawala like transactions by usage of shell firms by misusing banking channels. 

A clutch of over two dozen CAs, company secretaries and other tax professionals are being searched, they said, adding the action is part of a follow up of the country-wide searches the agency carried out early this month against 500 shell companies suspected to be generating huge amounts of black money. 

Also, certain cases of huge cash deposits, in which the agency had arrested two brothers, made by the tax professionals is under the scanner of the agency. 

The ED had conducted nationwide raids on April 1 in 16 states as part of its operation against shell firms and to hunt down those allegedly dubious and suspicious companies which the agency believes are the "backbone" of black money in the country. 

Shell companies are firms set up with nominal paid-up capital, high reserves and surplus on account of receipt of high share premium, investment in unlisted companies and no dividend income or high amount of cash-in-hand. 

Such firms also characteristically have private companies as majority shareholders, low turnover and operating income, nominal expenses, nominal statutory payments and stock in trade and minimum fixed assets. 

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