On October 12, the Income Tax department conducted comprehensive raids on a total of 55 locations involving government contractors, real estate developers, and their affiliated individuals. These raids resulted in the confiscation of a substantial sum of assets, including Rs 94 crore in cash, gold, and diamond jewelry valued at Rs 8 crore, and approximately 30 high-end luxury wristwatches. These operations unfolded in various regions, spanning Karnataka, Andhra Pradesh, Telangana, and New Delhi.
During the meticulous search and seizure activities, the Income Tax department uncovered a trove of incriminating evidence, comprising loose sheets, hard copies of documents, and digital data.
The investigations conducted by the tax department unveiled that these contractors had been engaging in practices designed to understate their income. These manipulations involved the inflation of expenses through the recording of fictitious purchases and the submission of non-genuine claims for expenses involving sub-contractors, along with demands for ineligible expense reimbursements.
These irregularities in the management of contract receipts led to the generation of significant amounts of unaccounted-for cash and the surreptitious creation of undisclosed assets.
The search revealed evidence of expense inflation through discrepancies in Goods Receipt Note (GRN) validation. Additionally, significant discrepancies were identified in documentation pertaining to recorded purchases and the physical transportation of goods, particularly with regard to fabricated transactions with sub-contractors, some of whom were also within the purview of the search operations.
Furthermore, these contractors were found to be recording expenses for purposes unrelated to their core business activities. Notably, evidence emerged of claims for liaison expenses, and these have been duly identified and confiscated.
Large-scale cash transactions, which had not been officially documented in the financial books of account, were also brought to light during the search. These transactions involved the premises of the assessees, sub-contractors, and associated individuals, including certain individuals responsible for cash handling.
The investigations are ongoing, with further inquiries underway to scrutinize the uncovered evidence.
Â
