The Income Tax Department detected bogus expenditure claims and alleged transfer of share capitals worth crores of rupees through shell companies after it recently raided some entities in Karnataka and Uttar Pradesh, including people linked to the Samajwadi Party.
The Central Board of Direct Taxes (CBDT), which frames policy for the tax department, said in a statement that searches on various persons and their business entities engaged in civil construction, real estate and running educational institutes in Uttar Pradesh and Karnataka were conducted on December 18.
A Kolkata-based entry operator (a person who undertakes fake transactions) was also covered in the search operation in which 30 premises in Lucknow, Mainpuri and Mau in Uttar Pradesh, national capital region, Kolkata and Bengaluru were raided.
The statement said 'incriminating evidences' including hard copy of documents and digital data were seized during the searches and preliminary analysis showed tax evasion in various ways.
'It was found that several entities engaged in the business of civil construction were involved in claiming bogus expenditure running into crores of rupees.
'Various incriminating documents including blank bill books, stamps, signed cheque books of bogus suppliers have been found and seized,' the statement said without identifying the entities raided.
In the case of one company, it said, undisclosed income of over Rs 86 crore of its directors was detected.
'Out of it, the person concerned has admitted (that) a sum of Rs 68 crore was his undisclosed income and offered to pay tax,' the CBDT said.
In the case of a proprietary concern, books of accounts relating to its turnover exceeding Rs 150 crore during the last few years could not be produced, the statement said.
In another concern, it was detected that the 'conduit of shell companies' was used to route unexplained income and investments.
'Such unexplained investment to the tune of Rs 12 crore has been identified. In case of another person, unexplained investment of Rs 11 crore in a shell company and investments in benami properties worth Rs 3.5 crore have been identified,' the statement said.
Samajwadi Party sources had said that the tax raids were conducted at the residences of party spokesperson Rajiv Rai in Mau, Jainendra Yadav, who was the OSD to former chief minister and party president Akhilesh Yadav, in Vinay Khand at Gomti Nagar in Lucknow, businessman Rahul Bhasin in Lucknow and contractor Manoj Yadav in Mainpuri.
Rai had alleged that the searches were 'politically motivated'.
Akhilesh Yadav claimed that whenever the Bharatiya Janata Party is about to lose elections in any state, the 'frequency of the misuse' of various enforcement agencies increases.
The CBDT said a Kolkata-based accommodation entry provider was also raided for 'providing accommodation entries' to these persons.
'It was found that the entry operator formed various shell companies to provide accommodation entries of bogus share capital to the tune of Rs 408 crore and bogus unsecured loan of Rs 154 crore through these shell companies,' it said.
'A substantial amount of digital data evidencing hawala transactions has been seized during the searches...
'The entry operator has admitted to the above modus operandi and also disclosed unaccounted commission income of Rs 5 crore,' it said.
On raids against a Bengaluru-based trust and its related entities, the statement said 'trust funds amounting to Rs 80 lakh have been transferred in the guise of donation for non-trust purposes to certain Kerala-based entities including Markazu Saquafathi Ssunniyya Trust and Markaz Knowledge City Trust, connected with Gulf countries, for the personal benefit of the trustees'.
It said prima facie, this indicated violation of relevant provisions related to the registration of trusts under the Income-tax Act for the claim of exemption as well as FEMA provisions.
'Evidences with regard to the collection of capitation fee of about Rs 10 crore in cash, and expenses to the tune of over Rs 4.8 crore incurred from the account of the trust, for the trustees' personal benefit, over the last three years have also been gathered,' it said.
The statement, without identifying specific heads, said Rs 1.12 crore 'unaccounted cash' was seized in these searches.
