Income-Tax dept raids moneylender's premises

The Income-Tax department raided five residential premises of Shankarao Punekar, a moneylender operating from Nagpur and Bhilewada village in Bhandara district, last week.

The search and seizure operation was carried out by a team of over 50 officials from the investigation wing of the I-T department.

The operation is significant in the light of the state government's recent decision to crack down on such moneylenders who are accused of behind farmers' suicides.

Sources say that this is the first time in the recent past that the tax officials have raided a moneylender. The action was based on a complaint received by the department.

Punekar was allegedly fleecing borrowers by charging interest as high as 150 per cent per annum and also evading tax on the income earned through this business. Once proven of his guilt, Punekar could face action under the Bombay Moneylending Act which prescribes a maximum limit of 18 per cent on the annual interest charged by private moneylenders, said a source. He will also be charged with tax evasion.

A resident of Nagpur, Punekar mainly operated in villages near Bhandara. Villagers said he could be banked upon for getting urgent cash on minimum documentation. While banks and other financial institutions took time in processing applications, he would do so instantly if he feels the borrower has sufficient repayment capacity.

According to the villagers, that Punekar spoke the language of the man on the street was an advantage for him. Moreover, he was readily available on weekly mandi, or bazaar, days. He has been in business for the last 25 years.

Poor farmers turned to him when in distress and, of course, Punekar helped, but at huge costs. The more the distress, the higher the interest rate, villagers say. Most often, money was lent only for a period of seven days.

The I-T raid covered four establishments of Punekar in the city and one in Bhandara.

So far the officials have recovered promissory notes, a couple of undisclosed bank accounts, and a regular stash of cash and jewellery. The seizure continued till late in the evening. The I-T sleuths had also laid their hands on evidence related to a huge investment in real estate as well as agriculture lands by the assessee.

Sources in Bhandara said Punekar had recently purchased four acres of land at Bhilewada for Rs 17 lakh.

Punekar holds a moneylending licence. He owns one double storeyed hotel each in Bhilewada and Shahapur.

The raided establishments include Punekar Bhavan, the assessee's sprawling residence at Vaishali Nagar, houses of his relatives in nearby places and in Itwari. Punekar's residence-cum-office near the Bhandara market area was also raided.

Though an assessee, he is alleged to have been paying very little tax by concealing substantial amount of his earnings.

"Neither did he report the income he earned by way of interest nor did he disclose the source of income used for lending money," said an official in the department.