BENGALURU: Income tax department sleuths on Monday carried out searches at over 40 locations connected to two leading real estate groups of Bengaluru and Hyderabad engaged in construction, educational and hospitality services.
Undisclosed cash totalling Rs 3.5 crore and gold and silver jewellery estimated to be worth Rs 18.5 crore have been found so far.
According to a statement from the Central Board of Direct Taxes, department of revenue, the searches were carried out in Bengaluru, Hyderabad and Chennai during which incriminating documents and digital evidence were seized.
Preliminary analysis of the seized evidence revealed that some landowners had entered into a joint development agreement with a Bengaluru-based developer and they had received super built-up area from the developer in lieu of land given for various projects. However, the owners failed to declare capital gains accruing from the transaction though completion certificates for the projects had been obtained. The amount of such undisclosed capital gains is estimated to be over Rs 400 crore, according to CBDT.
Investigation revealed the two groups suppressed income to the tune of Rs 90 crore in respect of revenue from the sale of real estate units, the CBDT statement said. Further, both groups indulged in tax evasion by inflating expenses in the construction and development business to the tune of Rs 28 crore by claiming bogus purchases and resorting to over-invoicing of construction materials, the statement said.
According to CBDT, it was discovered interest-bearing borrowed funds had been diverted to related parties for non-business purposes by main entities of both groups. Instances of transactions involving advances/loans between the group companies had been found which partake the character of deemed dividend, hence liable to be taxed as income. A trust that was searched had failed to utilise within the permissible time limit the accumulated amount of Rs 40 crore for the specified purpose as per the objects of the registered trust deed, CBDT said.
