IT department detects tax evasion worth crores after raids on Mumbai-based builder

NEW DELHI: The income tax department has detected alleged tax evasion worth crore of rupees after it recently raided a real estate group engaged in development of slum rehabilitation projects in Mumbai and Navi Mumbai region.

The CBDT said in a statement on Thursday that the searches on the group, that undertakes construction of both residential and commercial projects, were launched on November 25 and about 30 premises were covered.
Over Rs 6 crore cash was also seized, it said. “Various methods of tax evasion adopted by the group have been unearthed and several documentary and digital evidences have been seized demonstrating receipt of cash to the tune of Rs 100 crore, as part of consideration on sale of flats, which is not accounted for in the regular books of account,” the statement said.

“The fact of receipt of on-money (cash) on such transactions is also corroborated in the statements recorded during the searches,” the statement said. The statement said the unidentified group issued “promissory notes equivalent to the on-money (cash) component to the customers and these promissory notes are destroyed after registration of the flat.” “Incriminating evidence regarding unaccounted cash payments made not only to the original tenants of the slums for vacating the dwelling unit but also to some other persons for facilitating vacation of the properties by slum dwellers has been seized,” it said.

Evidences suggesting irregularities and violation of guidelines of slum rehabilitation authority (SRA) have also been detected, the Central Board of Direct Taxes (CBDT) said. Preliminary analysis of evidences found that the group has acquired controlling stake in a company by paying in cash, it claimed.”Defaults on compliances to the provisions of tax deduction at source have also been found. The assessee group did not deduct tax at source on certain payments claimed by it which aggregate to more than Rs 300 crore,” it said.