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December 16, 2020

Income Tax Department conducts searches in Pune and Tamil Nadu

by CA Shivam Jaiswal in Income Tax

Income Tax Department conducts searches in Pune and Tamil Nadu

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 along with 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 IT 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.

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.

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