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The Income Tax department said on Friday it has detected financial irregularities in a real estate firm after a search operation.

The department carried out a search operation earlier this month on business group based in Jhansi engaged in the business of civil contract and real estate development, an official statement said. The search operation covered around 30 premises located in Jhansi, Delhi, Lucknow, Kanpur and Goa.

During the search, several pieces of incriminating evidence have been found including documentary evidence of immovable properties of various third parties, the department alleged.

Preliminary analysis of evidence in the business of civil contract has revealed that the group was allegedly engaged in large scale tax evasion by suppression of its profits through manipulating the regular books of account at the end of every year, the department said without naming the company.

These manipulations were in the nature of claim of bogus expenses and bogus sundry creditors, etc, the department alleged.

These sundry creditors were found to be non-existent and unverifiable, it said in the statement. The claim of bogus expenses and bogus sundry creditors exceeding Rs. 250 crore has been quantified from the seized evidences, the statement alleged. The key person covered during the search has also voluntarily offered additional income exceeding Rs. 150 crore, out of this, the department said.

The companies engaged in real estate were not offering income to tax as per accounting standards, even when substantial construction work had been completed, the department alleged.

So far, investigation from evidences collected during the search has revealed the quantum of unaccounted receipts aggregating to more than Rs. 150 crore, the department said. The search operation has resulted in seizure of unaccounted cash and jewellery exceeding Rs. 15 crore, it said.

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