Unaccounted income of more than Rs 2,000 crore was found in Telangana and Andhra Pradesh during the search and seizure action conducted by the Income Tax Department last week, officials said on Thursday.
A statement issued by the Central Board of Direct Taxes (CBDT) on Thursday, February 13, stated that the searches were carried out at more than 40 premises in Hyderabad, Vijaywada, Cuddapah, Vishakhapatnam, Delhi, and Pune.
Premises belonging to three prominent infrastructure groups based in Andhra Pradesh and Telangana were part of the search action.
The searches identified major cash generation racket through bogus sub-contractors, over-invoicing and bogus billing. Several false documents and loose papers were seized during the search, an official release stated.
Surabhi Ahluwalia, a CBDT spokesperson in the statement revealed that the search operation was carried out on certain close associates including ex-personal secretary of a prominent person and incriminating evidence was allegedly seized.
The press release stated, ‘Preliminary estimates suggest siphoning of more than Rs 2000 crore through transactions that were layered through multiple entities with the last in the chain being small entities with turnover less than Rs 2 crore to avoid maintenance of books of accounts and tax audits.’
The I-T department found that such entities either did not provide their correct registered address or were shell entities.
The search action also brought cyber manipulation to the forefront. Several sub-contractors were found to be controlled by the principal contractors with all their Income Tax Return (ITR) filings and other compliances being done from the IP addresses of the main corporate office.
Foreign Direct Investment (FDI) receipts running into several crores in the group companies of one of the Infrastructure companies is suspected to be round-tripping of its unaccounted funds.
The statement did not reveal any names, however, unexplained cash of Rs 85 lakh and jewellery worth Rs 71 lakh have been seized. More than 25 bank lockers have also been restrained.
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