Hyderabad: Officials from the Income Tax Department conducted raids at 40 locations on two prominent real estate firms with offices in Hyderabad, Bengaluru, and Chennai, and confiscated Rs 18 crore in unaccounted cash and gold jewellery.
During the raids, the Income Tax officials recovered unaccounted cash worth Rs 3.50 crore and gold, silver, and jewellery worth Rs 18.50 crore. According to a preliminary investigation of the evidence that was collected, the landowners had signed a Joint Development Agreement (JDA) with a Bengaluru-based developer.
They have received a super built-up area from the developer in lieu of the land given to the developer for the development of various projects. However, the landowners failed to declare the capital gains accruing from the transaction, though completion certificates for the projects have been obtained, the Central Board of Direct Taxes (CBDT) said in a statement. The amount of such undisclosed capital gains is estimated at more than Rs 400 crore.
Additionally, it was revealed that these groups have suppressed income to the tune of Rs 90 crore in respect of the revenue recognizable from the sale of units in the real estates.
The two real estate firms have engaged in tax fraud by inflating expenses in their construction and development business to the tune of Rs 28 crore, having made bogus purchases and resorted to over-invoicing of the construction materials, the IT officials said.
Further, the primary entities of the two real estate firms have been discovered to have routed interest-bearing borrowed money to affiliated entities or parties for non-business activities. “Instances of the transactions involving advances/loans between the group companies have also been found, which partake the character of deemed dividend and hence liable to be taxed as income,” the CBDT stated.
In the case of a trust covered in the search action, it has been found that the trust has failed to utilise, within the specified permissible time limit, the accumulated amount of Rs 40 crore for the specified purpose as per the objects of the registered trust deed, the CBDT said.
