Government of India
Department of Revenue
Ministry of Finance
Central Board of Direct Taxes

New Delhi, 26th December, 2020

PRESS RELEASE

Income Tax Department conducts searches in Guwahati

Income Tax Department started a Search and Survey action on 22.12.2020 in the cases of three leading contractors of North Eastern India. One of the groups is also into Hospitality business. The Search and Survey actions are being carried out at 14
locations in Guwahati, Delhi, Silapathar and Pathsala (Assam).

The main allegations against the three groups are that they have taken accommodation entries in the form of non genuine unsecured loans and also securities premium from dubious Kolkata based shell companies. The three groups have suppressed their net profits across the years and routed back into business the unaccounted income through entry operators based out of Guwahati and Kolkata.

During the course of Search actions, it has been established that the shell companies from which loans/ premium had been taken exist only on paper and have no real business and creditworthiness. The entry operators, on being questioned, have admitted that the unsecured loans/share premium from the shell companies to the groups are non-genuine and bogus. Evidences of the cash trail of routing of funds through Securities premium was unearthed during search. It has been established that amounts to the tune of about Rs. 65 crore were routed back into regular books involving Shell companies which actually represent unaccounted income of the group. 

Further investigation is on to detect the actual quantum involved in tax evasion using this modus operandi. It has been gathered during the Search action that one of the groups engages in huge cash transactions in hospitality business of proportions as high as 50%, which is under examination. It has been further gathered that some of the entities of the groups engage in purchases of Jewellery in cash. The source of the cash purchases are under examination.

Till now, Jewellery to the tune of Rs. 9.79 lakh has been seized. The sources of acquisition of remaining Jewellery found exceeding Rs. 2 crore are under verification. 

Cash of Rs 2.95 crore has also been seized. Overall, undisclosed income to the tune of approximately Rs. 100 crore has been unearthed so far during the Search and Survey operation. One locker has been found, which is yet to be operated. Further investigations are under 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, 17th December, 2020

PRESS RELEASE

Income Tax Department conducts searches in Tamil Nadu

The Income Tax Department carried out searches on 14.12.2020 in a group case from Erode in Tamil Nadu, covering 15 premises at Erode and Chennai. The group is a leading civil contractor for Government works, specialized in erecting Seawave breaks along the coastlines and diversified into bus transport, running marriage halls and food masala business.

The highlight of the search is seizure of Rs. 21 crore of unaccounted cash. It was found that the group indulges in inflation of purchases and other work contract expenses. Such inflated payments made to the suppliers and subcontractors are received back in cash regularly. The unaccounted income thus generated comes to around Rs. 700 crore, which is ploughed back into real estate investments and business expansion. Out of this, the assessee has admitted to having undisclosed income of Rs. 150 crore, so far.

Overall there is a detection of Rs. 700 crore of unaccounted income and a seizure of Rs. 21 crore of unaccounted cash as a result of this search.

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, 15th December, 2020

PRESS RELEASE

Income Tax Department conducts searches in Tamil Nadu

The Income Tax Department carried out search and seizure operations on 09.12.2020 on premises of a leading business group operating from Chennai, based on intelligence input about tax evasion. The searches covered 60 premises located in Chennai, Trichy, Coimbatore, various places in Andhra Pradesh, Karnataka and Mumbai. The business activities include cement manufacturing, logistics, construction, among others.

The highlight of the search includes seizure of unaccounted cash of Rs. 23 crore from various locations. Foreign assets to the extent of Rs.110 crore in the form of Fixed Deposits have been found during the search, which were not disclosed in the return, and will attract action under the Black Money Act. Inflation of expenditure to take out cash and also to reduce profits, receipts not accounted fully, bogus claim of depreciation etc. amounting to Rs. 435 crore were also identified. There are indications of capitation fee receipts for medical admissions to post-graduate programmes.

During the search, details of the actual financial transaction between the searched group and another group for the sale of three infrastructure facilities at various ports were found. Complex financial arrangements creating bogus liabilities from their own concerns were also seen to be made, ostensibly, to reduce the capital gains arising out of this transfer. Capital gains amounting to approximately Rs. 280 crore have been arrived at. Similarly, huge capital introduction through a web of bogus inter corporate transactions within the group is also under the scanner.

A large number of lockers belonging to the group have been identified, which will be operated in due course. As of now, the Department has succeeded in detecting evasion of income of over Rs. 700 crore.

The search is temporarily concluded and investigations are still 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, 16th December, 2020

PRESS RELEASE

Income Tax Department conducts searches in Chandigarh

The Income Tax Department carried out search and seizure operations on 13.12.2020 in the case of a Chandigarh based listed pharmaceutical company and its associated concerns. A total of 11 premises were covered spanning Chandigarh, Delhi
and Mumbai.

The primary allegation against the group was that the assessee company had purchased 117 acres of Benami land in Indore, in the name of a conduit company. During the search, ample evidence has been found and seized which clearly establishes that the Benami company is a conduit of the pharmaceutical company with no real business activity. All the dummy directors and shareholders of the Benami company have also admitted in their respective statements that the company was a shell company with no real business activity and the land in Indore had been bought from the funds of the listed company for the benefit of the Managing Director.

The company was in the process of selling off this Benami land. Hot pursuit enquiries were conducted and an “agreement to sell” of the Benami land containing cash receipt of Rs. 6 crore was also found from the possession of the prospective buyers. The buyers have admitted in their statements that the deal was negotiated by the Managing Director and the agreement for the sale of the Benami land was signed in the office of the Managing Director. The buyers have also admitted that they had given unaccounted cash amounting to Rs. 6 crore on various dates through one hawala operator. The hawala operator in his statement, has also given a detailed modus operandi of cash transfer along with the exact dates and amounts of handing over of the cash by him in the office of the listed company.

Investigations have also proved that the Managing Director has claimed wrongful interest expense of Rs. 2.33 crore under Section 23 of the Income-tax Act, 1961 by showing his self-occupied property as a rented property to his sons. Cash amounting to Rs. 4.29 crore and jewellery amounting to Rs. 2.21 crore have been seized so far. 3 lockers have been put under restraint.

Further investigations regarding the holding of Benami shares worth Rs. 140 crore by the HUF of the Managing Director and bogus purchases of substantial amounts 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, 15th December, 2020

PRESS RELEASE

Income Tax Department conducts searches in Pune Region The Income Tax Department carried out search and survey action on 10.12.2020 in the cases of leading builders and entry operators in the Panvel region of Pune. The search and survey actions were carried out at 29 locations in Panvel and Vashi.

The search action on the group resulted in unearthing of incriminating data pertaining to routing of unaccounted income earned by way of on-money from flat and land sale from real estate projects of the group, in the form of accommodation entries of non-genuine unsecured loans through certain shell companies. Such accommodation entry of unsecured loans including interest paid of Rs. 58 crore in the books of accounts of the group was detected during the course of search and survey action. Details of non-genuine subcontract expenses of Rs. 10 crore were also detected alongwith unaccounted expenses of Rs. 5 crore in purchase of land.

Further, from the group covered under survey, incriminating evidence of Rs. 59 crore of undisclosed interest income earned against the loan amount paid by the group disguised as advances against land was found and impounded. From the action on entry operators, evidences related to cash investment of Rs. 5 crore in the purchase of land as well as accommodation entry of about Rs. 11 crore provided to various beneficiaries has been unearthed. The data pertaining to entry operators is still being analysed.

Moreover, unexplained / unaccounted cash of approximately Rs. 13.93 crore has also been found and seized during the search action by the Department. Hence, total unaccounted income of the group, detected, so far, is Rs. 163 crore, including the cash seized during the search and survey action. Further, more evidences related to out-of-books transactions by taking on-money on the sale of flats and land have been seized.

Further investigations are in progress.

(Surabhi Ahluwalia)
Commissioner of Income Tax
(Media & Technical Policy)
Official Spokesperson, CBDT