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IT dept search on business groups in Mumbai throws up evidence of tax evasion, money laundering

Our Bureau New Delhi | Updated on November 14, 2019 Published on November 14, 2019

The Income Tax Department had last week conducted search action in Mumbai and Surat on entry providers and beneficiaries engaged in the execution of civil contracts, mainly in the Brihanmumbai Municipal Corporation (BMC).

A total of 37 premises were covered under the search action and seven premises were covered in the survey, an official release said.

There were reports that certain contractors had taken entries in the form of loans from entry providers and also inflated expenses in the books of accounts, to suppress income.

Incriminating evidence of large-scale tax evasion and money laundering has been found. It has also led to the detection of the use of bogus companies (floated by entry providers) to give entries to businesses in the form of loans or bills for expenses. In the case of the entry providers, a systematic modus operandi of bank fraud and forgery has been detected, whereby, the promoters have made investments in immovable properties and shares of group companies by siphoning off bank loans.

In the case of the contractor groups, several instances of the inflation of expenses by bogus purchases/ sub-contracts and taking of loans from entry providers, has been identified.

So far, detection has been made to the tune of Rs 735 crore and the extent of accommodation entries is being quantified, the release added.

Investigations are in progress, including identification of the remaining beneficiaries

Published on November 14, 2019
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