Income Tax Dept raids prominent contractor in Bihar & Jharkhand; Rs 100 cr 'unaccounted'

In a breaking development, on November 1 the Income Tax Department conducted a 'search and seizure operation' on a prominent road construction contractor in Bihar and Jharkhand. In addition, the Ministry of Finance stated that the said raid commenced on October 27, 2021, which revealed the suppression of 'profits' across various locations linked in Maharashtra and West Bengal as well. 

Income Tax Department raids prominent contractor in Bihar & Jharkhand

Highlighting that the perpetrators had hidden their profit-making by amplifying their expenditure and purchases, the Ministry of Finance stated that the group even indulged in breaking up hefty and dubious amounts of money into unconcentrated and less-suspicious sums or depositing across various bank accounts to obtain accommodation entries to evade tax. 

"The searches revealed that the group has been suppressing its profits by inflating expenses on the purchase of materials. Such excess material is sold in the market in cash but cash so generated remains unaccounted for. It has been also found that the group has indulged in obtaining accommodation entries for inflating other business expenses. Incriminating documents such as handwritten diaries have been seized from the premises of commission agents who have been assisting the assessee group in these dubious practices," the Ministry of Finance stated in a press release. 

'Evaded tax on crores': Ministry of Finance

Also, the press release highlighted that the seized documents have disclosed elements of evidence that indicate 'unaccounted cash generation and movement of material'. 

"The search operation has further revealed that the group is also suppressing contractual receipts and service income. It was further seen that the group is not maintaining proper books of accounts, including supporting documents like bills and vouchers," it added. 

It was informed that the recovered documents have indicated the movement of out-of-place cash across various locations for unsolicited investment in immovable properties and the breach includes cash expenses of 'personal nature' too. 

"It has been detected during the search operation that the commission agents and suppliers of bogus bills have also evaded tax on crores of income as they have indulged in providing accommodation entries to other parties as well," the press release stated.

Further, the Ministry outline that the search and raid resulted in the seizure of unaccounted cash of Rs 5.71 crore wherein ten bank lockers have been placed under restraint. 

"An investment made in fixed deposits, etc. of about Rs. 60 crore is under verification. The search action has led to the detection of unaccounted income to the tune of about Rs. 100 crore," the press release added.