Income Tax Dept detects ₹300 cr black money after raids in Rajasthan, Maharashtra

The Income Tax Department has detected black money of over ₹300 crore after raids at multiple locations in Rajasthan and Haryana, the Ministry of Finance informed on Tuesday.  

In Maharashtra, the department carried out search and seizure operations last week on two business groups of Nandurbar and Dhule districts. These groups are engaged in the business of civil construction and land development. 

The search operation covered more than 25 premises spread across Nanndurbar, Dhule and Nashik. 

The ministry said that in the case of entities belonging to the first group, the seized documents reveal that they have resorted to large-scale suppression of taxable income by inflating their expenses, primarily by way of the claim of non-genuine sub-contract expenses and unverifiable old sundry creditors. 

“The preliminary investigation indicates that this group has evaded income to the extent of Rs. 150 crore on account of the above malpractices,” the statement said.

In the case of the land developers, the department found that a substantial part of the land transactions had been carried out in cash which were not accounted for in the regular books of account. “Further, documents evidencing receipt of ‘on-money’ on land transactions and cash loans exceeding Rs. 52 crore have been found and seized,” it said. The department also seized unaccounted cash of more than Rs. 5 crore and jewellery valued at Rs. 5 crore.

In Rajasthan, the department carried out searched on two groups and their business entities. One group is engaged in the business of manufacturing electrical switches, wires, LEDs, real estate and hotel business in Rajasthan, Maharashtra and Uttarakhand whereas, the other group is engaged in money lending business in Jaipur and nearby cities. 

The search action covered more than 50 premises spread over various locations including Jaipur, Mumbai, and Haridwar. 

The I-T found that several entities, engaged in the business of manufacturing switches, wires, LEDs have been selling such goods which are not recorded in the regular books of account. They also noticed that the these entities were claiming bogus expenses to reduce taxable income. 

In the case of this group, the search team has detected transactions evidencing undisclosed income of more than Rs.150 crore. The key person of the group has admitted Rs.55 crore as undisclosed income and has offered to pay tax thereon, it said.

The department also found that most of the loans are given in cash and a relatively high rate of interest has been charged on these loans. 

“Neither the loans advanced nor the interest income earned thereon, have been disclosed in the returns of income of the persons engaged in this business. Evidence relating to undisclosed income of more than Rs.150 crore has been detected in this group. The search action, so far, has resulted in total seizure of unaccounted cash and jewellery worth Rs.17 crore,” the statement said.