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Income-tax dept carries out searches at Era Constructions

Income-tax dept carries out searches at Era Constructions
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First Published: Thu, Oct 25 2007. 11 02 PM IST
Updated: Thu, Oct 25 2007. 11 02 PM IST
Construction company Era Constructions India Ltd was subjected to a day-long income tax (I-T) department search on Wednesday.
Era confirmed that an I-T search in multiple locations had taken place.
“I-T officials had come to our office yesterday in the morning and they were there till late evening,” a company spokesperson said.
However, no documents were seized from the office premises, according to the company.
“We believe this is part of a routine check that the I-T department has been carrying out on the realty sector in the past week,” the spokesperson said.
The tax department has been particularly active in the Capital in terms of examining real estate companies.
Another real estate developer which is preparing for an initial public offering, Emaar-MGF Land Ltd, was subjected to a similar search and seizure operation on 12 September.
According to the draft red herring prospectus filed by the company with the stock market regulator Securities and Exchange Board of India, during the course of the search and seizure operations, I-T authorities had taken custody of certain materials such as documents, records, computer files, hardware and recorded statements of some company officials.
In Emaar’s case, search and seizure operation was also conducted at the residences of certain directors, promoters and promoter group companies.
Emaar-MGF is a joint venture between Dubai’s largest real estate developer, Emaar Properties PJSC, and Indian real estate developer, MGF Developments Ltd.
An I-T search by itself doesn’t imply any wrongdoing. Such as search requires a warrant that is approved by the director general of ­investigations, the highest ranking investigation official in the department. And a raid can take place only after this officer approves the “satisfaction note”, which records reasons for a search to be conducted.
Era was incorporated in 1990 and is a medium-sized construction company engaged in construction activities for airports, power projects, infrastructure and residential buildings.
The company got listed in 2005. In the year ended March, Era posted a net profit of Rs79.12 crore on revenues of Rs784.98 crore.
Era shares fell Rs9.60, or 1.67%, to close at Rs564.50 on BSE on Thursday. It is trading well above its 52-week low of Rs281.95 of 6 March, according to BSE’s website.
Sanjiv Shankaran contributed to this story.
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First Published: Thu, Oct 25 2007. 11 02 PM IST