IT searches on 3 infra groups in TS, AP leads to unaccounted income of over ₹2,000 cr

Our Bureau Hyderabad | Updated on February 13, 2020

Searches conducted by the Income Tax Department lead to detection of unaccounted income of more than ₹2,000 crore.

The Income Tax Department had carried out Search and Seizure action on February 6, 2020 at Hyderabad, Vijayawada, Cuddapah, Visakhapatnam, Delhi and Pune covering more than 40 premises.

The search action included three prominent infrastructure groups based in Andhra Pradesh and Telangana.

Investigations led to busting of a major racket of cash generation through bogus sub-contractors, over-invoicing and bogus billing. Several incriminating documents and loose papers were found and seized during the search, apart from emails, WhatsApp messages, unexplained foreign transactions were unearthed during the search.

Search operation was also carried out on close associates including ex-personal secretary of a prominent person and incriminating evidence seized, according to a statement from Surabhi Ahluwalia, Commissioner of Income Tax (Media & Technical Policy) and Official Spokesperson of CBDT.

The search operations revealed that the infrastructure companies had subcontracted work to several non-existent/bogus entities. Preliminary estimates suggest siphoning of more than ₹2,000 crore through transactions that were layered through multiple entities with the last in the chain being small entities with turnover less than ₹2 crore to avoid maintenance of books of accounts and tax audits.

Such entities were either not found at their registered address or were found to be shell entities. Several such sub-contractors were controlled by the principal contractors with all their ITR filings and other compliances being done from the IP addresses of main corporate office.

FDI receipts of several crores of rupees in the group companies of one of the infrastructure companies is suspected to be round-tripping of its unaccounted funds.

Unexplained cash of ₹85 lakh and jewellery worth ₹71 lakh have been seized. More than 25 bank lockers have been restrained.

Published on February 13, 2020

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