The Income-Tax Department has conducted searches against a Hyderabad-based group into real estate, construction, waste management and infrastructure, leading to the detection of unaccounted income to the tune of ₹300 crore.
The group’s waste management business is spread across India, while its real estate activities are mainly concentrated in Hyderabad.
“The search operation led to detection of artificial loss of about ₹1,200 crore, which is to be taxed in the hands of the respective assessees,” said the department in a statement on Friday.
‘Losses artificially created’
During the searches, it found that the group had sold majority stake to a non-resident entity based in Singapore in one of its group concerns during 2018-19 and earned huge capital gains.
Subsequently, it devised various ways — by entering into a series of share purchase, sale or non-arm’s length valued subscription, apart from bonus issuance, with related parties to show losses. Based on its findings, the department alleges that the losses were artificially created to set off the respective capital gains.
Bad debts claim
It is also alleged that the assessees had incorrectly claimed bad debts to the tune of ₹288 crore on account of related party transactions, which was set off against the profits earned.
“Unaccounted cash transactions with the associates of the group have also been detected during the search, and the quantum and modus of the same is under examination,” said the department.
The entities and associates involved have admitted to having unaccounted income of ₹300 crore and have also agreed to pay due taxes, the department stated.
