The Income Tax Department conducted search operations on two real estate groups based in Delhi-NCR regarding an allegation that there was a case of large-scale tax evasion. The Central Board of Direct Taxes (CBDT) said on Wednesday that they seized unaccounted cash of Rs 10 crore. As per the CBDT, the search operations took place on November 17. The evidence gathered so far has given an idea to the CBDT that the undisclosed income could be at least more than Rs 400 crore and the CBDT said that these real estate firms were big entities in the field of construction of commercial and residential projects. The IT department was also able to confiscate various incriminating evidence in the form of digital and physical data, ANI reported.
The CBDT said, "On preliminary analysis of such data, it has been found that these groups are receiving part of the sale consideration in cash against the sale of flats and such cash is not recorded in the books of accounts. Thus, there is large-scale tax evasion, and due tax on such income has not been offered." The search team has found evidence pointing to the fact that the unaccounted income earned is pushed into the business through non-descript and non-functional shell entities which are run by professional entry providers or employees/associates of the group working as directors.
According to ANI report, the IT department further said, "One of the groups has also been found to be using a network of charitable organizations engaged in educational activities, purportedly for the purpose of tax evasion and financing its real estate business." The evidence has also been seized showing proof that the books of accounts maintained and produced before tax authorities were doctored by 'reversal of payables', 'diminution of investment' and 'bad debts written- off'. It said, "Instances of the non-genuine claim of expenses by way of bogus purchases by connected parties from non-existent suppliers have also come to notice. Evidence of cash payments made to various parties towards securing land deals and other contracts, and making various unaccounted expenses in real estate activities have been unearthed." The IT department is currently further investigating the matter.