IT raid on infra firm detects Rs 300 crore unaccounted income

Hyderabad: A search and seizure operation carried out by the Income Tax (I-T) Department on the premises of a city-based real estate and infra company on June 6 found projection of false losses of approximately Rs. 1,200 crore, for which the assessees will have to pay tax. During the course of searches, it was found […]

Hyderabad: A search and seizure operation carried out by the Income Tax (I-T) Department on the premises of a city-based real estate and infra company on June 6 found projection of false losses of approximately Rs. 1,200 crore, for which the assessees will have to pay tax. During the course of searches, it was found that the assessees had incorrectly claimed bad debts to the tune of Rs 288 crore on account of related party transactions, which was set off against the aforementioned profits earned.

During search proceedings, incriminating documents relating to this artificial and incorrect claim were found. Unaccounted cash transactions with the associates of the group have also been detected during the search, and the quantum and modus of the same is under examination.

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As a result of the search operation and on the basis of various incriminating documents found, the entities and associates have admitted to having unaccounted income of Rs 300 crore and have also agreed to pay due taxes, an IT Department press release said on Friday.

The group is engaged in real estate, construction, waste management and infrastructure. The activities of waste management are spread across India while real estate activities were mainly concentrated in Hyderabad.

During the search operation, many incriminating documents, loose sheets among others were seized indicating involvement of the group in unaccounted transactions. It was found that the group had sold majority stake to a non-resident entity based in Singapore, in one of its group concerns during financial year 2018-19 and had earned huge capital gains.

The group subsequently devised various colourable schemes by means of entering into a series of share purchase/sale/non arm’s length valued subscription and subsequent bonus issuance with related parties, creating a loss which was set off against the capital gains earned.

Incriminating evidence and documents have been recovered, which indicate that the loss was artificially created to set off the respective capital gains. The search operation led to detection of artificial loss of approximately Rs 1,200 crore, which is to be taxed in the hands of the respective assessees. Further investigation is underway.

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