Government of India

Department of Revenue

Ministry of Finance

Central Board of Direct Taxes

New Delhi, 21st February, 2021

PRESS RELEASE

Income Tax Department conducts searches in J & K

Income Tax Department conducted a search & seizure operation on 19.02.2021, on a group running the biggest private Multi-speciality Hospital in Srinagar with more than 100 beds. Seven premises including 4 residential premises, all in Srinagar, were covered in the search.

The core business of the group includes running of the Hospital, Real Estate & Trading of Household Consumables. 

The group is in the practice of buying large chunks of lands in piecemeal and aggregating them. Thereafter, it develops the land and carves out plots and sells them. Evidence showing more than 50% of consideration (over & above the registered value of the property) received in cash from buyers, has been seized during the search operation. Such sale consideration received in cash has never been offered to tax.

The group has made unaccounted property transactions of more than Rs.100 crore in cash since FY 2013-14 onwards. The payments/investments made through banking channels by the buyers of plots are also under investigation as prima-facie verification has shown that the investments have not been made using tax paid income. Thus, taxes will be leviable not only on the seller group but the buyers also, depending on the facts of the cases. There is substantial default of TDS on almost all purchases & sales of land/plots.

Further, the search has revealed substantial evasion of stamp duty due to the State Govt./ Union Territory on cash paid as sale consideration over & above the registered value of the property. The information in this regard will be shared with the J & K Union Territory Authority for levy of stamp duty on the entire sale consideration, as evident from the seized documents and notification of circle rates as per the prevailing market rates.

                During the search, it was also seen that the individuals have taken a number of plots/land as gifts from various unrelated individuals and they have not shown any income on this score u/s 56 of the I. T. Act, 1961 even though the same is chargeable to tax in the hands of the donee as income from other sources. The cases of the donors are also under investigation from the perspective of evasion of income tax.

Further, one of the taxpayers of this group engaged in trading of household consumables has made cash purchases of household consumables worth Rs.2.00 crore in 6 months in FY 2019-20, in violation of tax provisions which mandate payment of more than Rs.10,000/- at a time through banking channels only.

Evidence of various Benami Properties has also been unearthed and seized during the search. The same is under investigation.

Suppression of receipts from the running of the Hospital is under investigation. The average turnover shown by the Hospital is around Rs.10-12 crore since FY 2015-16; however, seized evidence shows actual receipts to be at least four times more. Evidence showing cash payments of Rs.3.00 crore, made to various doctors in the current year, has been seized during the search.

Cash of Rs. 82.75 lakh and Jewellery & Bullion worth Rs.35.7 lakh have been seized as the concerned persons from whose custody these were found were not able to explain the same. One Bank Locker has been sealed.

Further investigations are in progress.

(Surabhi Ahluwalia)

Commissioner of Income Tax

(Media & Technical Policy)

Official Spokesperson, CBDT

 

Government of India

Department of Revenue

Ministry of Finance

Central Board of Direct Taxes

New Delhi, 18th February, 2021

PRESS RELEASE

Income Tax Department conducts searches in Hyderabad

The Income Tax Department carried out search and seizure operation on a group based in Eluru on 28.01.2021 at 21 different locations across Andhra Pradesh and Telangana. The group entities are engaged in Film Financing, Aqua Culture, Real estate, Distribution of Films and Money Lending.

During the course of the search operation, hand written books, agreements and loose sheets depicting undisclosed cash transactions were seized. The group is lending huge amounts in cash and collecting interest for the same in cash, which are undisclosed. It is also observed that certain entries totaling to Rs.13 crore were deleted from the cloud data, but recovered. A major suppression of income from distribution of films and running theatres has also been observed. The group is also accepting cash over and above the registration value in sale of plots.

Total assets worth Rs. 17.68 crore which includes cash of Rs. 14.26 crore, gold Jewellery, Bullion and Silver valued at Rs. 3.42 crore have been seized so far. The highlight of the search action is the seizure of such huge amount of cash and gold in mofussil stations like Eluru and Rajamahendravaram. In total, the search has resulted in detecting incriminating evidence relating to undisclosed financial transactions of Rs. 161 crore from F.Y 2016-17 to F.Y 2019-20, taxable in the hands of both the transacted parties.

Further investigations are in progress.

(Surabhi Ahluwalia)

Commissioner of Income Tax

(Media & Technical Policy)

Official Spokesperson, CBDT

 

Government of India

Department of Revenue

Ministry of Finance

Central Board of Direct Taxes

New Delhi, 18th February, 2021

PRESS RELEASE

Income Tax Department conducts searches in Bengaluru

The Income Tax Department conducted search and seizure operation on 17.02.2021 on 09 major Trusts registered in Bengaluru & Mangaluru, which are running educational institutes including medical colleges. Searches were conducted at 56 different locations across Karnataka and Kerala.

During the course of the search and seizure operation it was found that the transparent selection process to Medical colleges through NEET has been subverted by Trustees and key persons running these Medical Colleges in collusion with agents/brokers and some students who got high ranks in NEET Examination. The first stage of malpractice is that some high ranking students in NEET examination take admission to MBBS courses through state counseling (who have no intention to join the said colleges as they have secured admissions or likely to get admission elsewhere), thereby blocking seats in the medical stream in a Medical college during Karnataka Examinations Authority (KEA) counseling process, in connivance with Agents/ Middlemen/Converters (who provide service of converting the regular seats to Management seats). Subsequently, these students withdraw from the admission process thereby making the vacant seats available for the college management. Such seats are made available to the college management for filling up through the “Stray Vacancies Round” (seats remaining vacant or unfilled in a college after mop-up round). In this Round, the seats are filled by the college management by admitting less meritorious candidates (Low rank in NEET) after collecting huge sums as capitation fee/donations in cash which are illegal under the Karnataka Educational Institutions (Prohibition of Capitation Fee) Act, 1984. The capitation fee/ Donations are collected through a network of brokers/ agents employed by the key persons/Trustees of these medical colleges.

The search operation has resulted in detecting incriminating evidence regarding cash-for-seat malpractices for admission to MBBS, BDS and Post Graduate seats in the form of notebooks, hand written diaries, excel sheets containing the details of cash received from students/brokers for admission in these colleges for various years. It was also observed that the management, faculty, staff, meritorious students and brokers are working in close nexus to manipulate the online admission process. Also, there is evidence indicating that one of the medical colleges have some sort of “package arrangement” for passing management quota students in written examination and viva voce for fixed sum ranging from Rs. 1 lakh to Rs. 2 lakh.

Further, there is evidence which prima facie suggests that the cash money accepted by manipulating the online admission process in these colleges has been diverted for non-charitable purpose by the Trustees which is clearly in violation of Sec 12AA of the Income-tax Act, 1961. Apart from this, evidence has been found regarding large number of investments made in immovable properties with huge cash component attracting provisions of section 69 of the Income-tax Act, 1961. One of the colleges has diversified into the business of timber/plywood industries where evidence regardingunder invoicing has also been found.

So far, the evidence gathered indicates that Rs. 402.78 crore has been accepted as illegal capitation fees by manipulating the online admission process and the same has not been disclosed to the Income Tax Department. Searches have resulted in seizure of cash amounting to Rs. 15.09 crore. Gold Jewellery of 81 Kg (valued at Rs. 30 crore), 50 carat diamonds and 40 kg of silver articles have been found from the residential premises of the trustees and are prime facie, unexplained. Evidence of undisclosed foreign assets of Rs. 2.39 crore in Ghana has also been found apart from evidence of huge investments in 35 Luxury cars in benami names.

Further investigation is in progress.

(Surabhi Ahluwalia)

Commissioner of Income Tax

(Media & Technical Policy)

Official Spokesperson, CBDT

 

Government of India

Department of Revenue

Ministry of Finance

Central Board of Direct Taxes

Dated:15th February, 2021

PRESS RELEASE

Income Tax Department conducts searches in Mumbai

The Income Tax Department carried out search and survey operations on a group based in Mumbai on 08.02.2021. This group is mainly engaged in the business of manufacturing of Gutkha, Pan masala and allied substances, besides having operations in hospitality sector. The searches were carried out across many locations in India and concluded on 13.02.2021.

The search and seizure action has led to detection of foreign assets lying with a company registered in tax-haven British Virgin Islands (BVI) with an office in Dubai and controlled and managed by the Chairman of the group. The net worth of the BVI company is Rs. 830 crore created by siphoning of funds from India. This fund has been round tripped to India in the form of share premium amounting to Rs. 638 crore in the flagship companies of the group. During the search action, various digital evidences and forensic analysis have yielded email communication, establishing control and management of the company with the promoter of the group searched. One of the employees, who was also a shareholder in the BVI company, was identified and cross examined with the promoter. It has been accepted by the parties involved that the employee was not aware about being a shareholder in the company and he had signed papers on the instruction of the main promoter.

Further, it has been found that the group has availed bogus deduction under section 80IC of the Income-tax Act, 1961 to an extent of Rs. 398 crore. The group set up 2 entities in Himachal Pradesh and the group was found to indulge in sham transactions in order to claim the aforesaid false deduction.

Apart from the above, unaccounted production of pan masala of an amount of Rs. 247 crore at 2 factory premises of the group has also been detected during the search.

It has also been seen that the assessee has falsely claimed deduction u/s 10AA of the Income-tax Act, 1961 of an amount of Rs. 63 crore in the Gandhi Dham unit.

During the search action, cash of Rs. 13 lakh has been seized and jewellery amounting to Rs. 7 crore was found and has been put under prohibitory orders. Prohibitory orders have also been placed on 16 lockers and in 11 premises. Thus, the search action has led to detection of unaccounted transactions of around Rs. 1500 crore, so far.

Further investigations are in progress.

(Surabhi Ahluwalia)

Commissioner of Income Tax

(Media & Technical Policy)

Official Spokesperson, CBDT

 

Government of India

Department of Revenue

Ministry of Finance

Central Board of Direct Taxes

Dated: 1th February, 2021 

PRESS RELEASE 

Income Tax Department conducts searches in Bengaluru 

The Income Tax Department carried out search and seizure operation on a major liquor manufacturer group based in Bengaluru on 09.02.2021 at 26 different locations across India. This group has huge land bank which is being developed into residential and commercial properties with a builder based in Bengaluru. The searches have resulted in detecting incriminating evidences relating to concealment of income of more than Rs. 692.82 crore on account of Joint Development Projects with a major builder based in Bengaluru. Also, the group companies have fraudulently claimed expenses amounting to Rs. 86 crore. In respect of their liquor business, unaccounted sales amounting to Rs. 74 crore have been detected from one of their liquor manufacturing plants based in Kerala. The group companies have also claimed bogus expenses of Rs. 17 crore in their business entities. The Directors of the group have incurred unexplained expenditure of Rs. 9 crore attracting the provisions of Section 69C of Income-tax Act, 1961.

There are large number of investments made in benami properties in the names of their employees and associates for several years. In total 35 suspected benami properties in the names of their relatives and associates valued at more than Rs. 150 crore have been identified. There are also evidences of foreign assets in the name of a director of the group company.

In all, the search and seizure action has resulted in the detection of total undisclosed income of Rs. 878.82 crore.

Further investigations are in progress.

(Surabhi Ahluwalia)

Commissioner of Income Tax

(Media & Technical Policy)

Official Spokesperson, CBDT