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Tax raids on two leading Delhi-NCR builders unearth Rs 400 crore in black money

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IT Department has unearthed undisclosed income to the tune of Rs 400 crore in a search and seizure operation on two real estate groups based in Delhi-NCR. (Representational Image)

The Income Tax Department has unearthed undisclosed income to the tune of Rs 400 crore in a search and seizure operation on two real estate groups based in Delhi-NCR, according to a finance ministry statement issued on Wednesday. 

Rs 10 crore in hard cash, which could not be accounted for, was also seized from the two groups engaged in the construction of large commercial and residential projects.

During the course of the search action carried out on November 17, incriminating evidence in the form of digital and physical data has also been seized. 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 which is not recorded in the books of accounts. Thus, there is large scale tax evasion that is taking place, the official statement said.

The search team has gathered evidence indicating that unaccounted income so earned is routed into the business through nondescript and non-functional shell entities run by professional entry providers or employees/associates of the group working as directors.

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. Evidence has also been found showing that the books of accounts maintained and produced before tax authorities are doctored by ‘reversal of payables’, ‘diminution of investment’ and ‘bad debts that were shown as “written- off.” Instances of non-genuine claim of expenses by way of bogus purchases by connected parties from non-existent suppliers have also been discovered.

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 also been unearthed.

Further investigations in these cases are under progress.