Cash, gold, diamonds worth Rs 102 crore seized during IT raids in Karnataka, Andhra Pradesh, Telangana

HYDERABAD: The Income-Tax department conducted a search and seizure action on Monday in the case of some Government contractors, real estate developers, and their associates on October 12, 2023.

The search operation covered approximately 55 premises in the States of Karnataka, Andhra Pradesh, Telangana, and New Delhi. The search led to the seizure of over Rs 102 crore in unaccounted cash and gold and diamond jewellery.

A large number of incriminating evidence in the form of loose sheets, hard copies of documents, and digital data were discovered and seized, according to the Central Board of Direct Taxes (CBDT).

The modus-operandi of tax evasion detected indicates that these contractors were involved in reducing their income by inflation of expenses by booking bogus purchases, non-genuine claims of expenses with sub-contractors and claiming ineligible expenses.

The irregularities detected in the utilisation of contract receipts resulted in the generation of huge amounts of unaccounted cash and the creation of undisclosed assets. Evidence indicating inflation of expenses in the form of discrepancies in Goods Receipt Note (GRN) validation were also unearthed during the search.

Evidence of huge discrepancies in documentation related to purchases booked and actual physical transport of goods were also been unearthed, with regard to bogus transactions with sub-contractors, some of whom were also covered during the search.

Further, these contractors were also involved in booking expenses for non-business purposes. Evidence of claims of liaison expenses have also been found and seized.

Large scale unaccounted cash transactions, which were not found recorded in the books of account, have also been found during the search, from the premises of assessees, sub-contractors, and associates including certain cash handlers.

The search resulted in a seizure of unaccounted cash of approximately Rs 94 crore and gold and diamond jewellery of over Rs.8 crore, aggregating to more than Rs 102 crore. Further, a cache of about 30 luxury wrist watches of foreign make were unearthed from the premises of a private salaried employee, not engaged in the business of wrist watches. Further investigations are underway.