The Income Tax Department carried out search and seizure operations on one of the leading groups of Karnataka, engaged in the civil construction of roads and irrigation projects, on October 28, 2021, at various premises located in North Karnataka.
The search operation revealed that this group has been suppressing its profits by booking bogus expenses in purchase of materials, labour expenses and payment to subcontractors. The search action has led to detection of unaccounted income of more than Rs 70 crore which has been admitted as undisclosed income by the assessee group, the tax department said in a statement.
Various incriminating documents including digital evidences indicating non-genuine claim of such expenses have been found and seized. Analysis of the same shows that unaccounted cash has been received by the key group person from such vendors/ suppliers of materials.
It was also found that their own relatives/friends/employees were used as conduits in the name of subcontractors who neither executed any work nor did they have the capability/capacity to execute the work. The assessee group has been generating unaccounted cash from these transactions. Further investigations are in progress.
Meanwhile, earlier this month, the I-T Dept informed that it carried out search and seizure operations in the cases of two groups based in Punjab. The search action in case of the first group was initiated on October 21, 2021. The second group, based in Jalandhar, is engaged in providing immigration & study visa related services to students. The search action in this group was initiated on October 18.
The first group, engaged in the Cycle business, has been found to be involved in suppression of income by showing bogus intra-group transactions within group concerns.
As per the tax department, the group was also found to have been involved in receiving a substantial part of sale consideration in cash and thereby suppressing the turnover. The seized documents reveal suppression of turnover of around Rs 90 crore per annum by a group concern. Incriminating documents related to the undisclosed sale of scrap have also been seized.
The search also revealed undisclosed investments by the group members in immovable properties The search action has led to detection of unaccounted income of about Rs 150 crore. The search action has resulted in seizure of unaccounted cash of Rs 2.25 crore and seizure of unaccounted gold of Rs 2 crore in this group, I-T department said.
Search action against the second group has revealed that the group used to charge a package, ranging between Rs 10 lakh to Rs 15 lakh per student, depending on the country where the student wished to pursue education.
Almost the entire receipts of the group, aggregating to more than Rs 200 crore in the last 5 years are in cash. It has also been found that the bank accounts of the employees have been used to receive money, which has subsequently been withdrawn in cash. The profit earned from such receipts has never been disclosed in the Income Tax Returns filed. Only the commission received from foreign universities has been shown as receipts in the tax Returns by the members of the group.
The search action has led to detection of unaccounted income of about Rs 40 crore. The search action has also resulted in seizure of unaccounted cash of Rs 20 lakh and seizure of unaccounted jewellery of Rs 33 lakh.
