Income tax department conducted a search & seizure action in the case of some Government Contractors, Real estate developers and their Associates on 12.10.2023. About 55 premises were covered during the search action in the State of Karnataka, AP, Telangana and New Delhi.
A large number of incriminating evidences in the form of loose sheets, hard copy of documents and digital data have been found and seized. The modus-operandi of tax evasion detected indicates that these contractors were involved in reducing their income by inflation of expenses by booking bogus purchases, non-genuine claim of expenses with sub-contractors and claiming ineligible expenses. The irregularities detected in utilization of contract receipts, has resulted in generation of huge unaccounted cash and creation of undisclosed assets.
Evidence indicating inflation of expenses in the form of discrepancies in Goods Receipt Note (GRN) validation have been unearthed during the search. Evidences of huge discrepancies in documentation related to purchases booked and actual physical transport of goods have also been unearthed, with regard to bogus transactions with sub-contractors, some of whom were also covered during the search. Further, these contractors were also involved in booking expenses for non-business purposes. Evidences of claim of liaison expenses have also been found and seized.
Large scale unaccounted cash transactions, which are not found recorded in the books of account, have also been found during the search, from the premises of assessees, sub-contractors, and associates including certain cash handlers.
The search has resulted in seizure of unaccounted cash of approximately Rs.94 crore and gold and diamond jewellery of over Rs.8 crore, aggregating to more than Rs. 102 crore. Further, a cache of about 30 luxury wrist watches of foreign make were unearthed from the premises of a private salaried employee, not engaged in the business of wrist watches.
Further investigations are in process.