Income Tax Department Conducts Search in Mumbai

On March 8, 2022, the Income Tax Department conducted a search operation on a Mumbai cable operator, a State Government employee, and the businesses associated with him. A total of 26 locations in Mumbai, Pune, Sangli, and Ratnagiri were covered.

During the investigation, it was discovered that a parcel of land in Dapoli was purchased in 2017 for Rs. 1 crore by a prominent Maharashtra politician, but it was only registered in 2019. This land was later sold in 2020 for Rs. 1.10 crore to one of the individuals named in the search action. Between 2017 and 2020, a resort was built on the same property. Significant construction of the resort had been completed by the time the parcel of land was registered in the name of the said politician. Later, when the politician sold the property to the cable operator in 2020, the resort was nearly finished. It turns out that the relevant facts about the resort’s construction were not communicated to the Registration authorities, and thus the stamp duty was paid only for the registration of the land on both occasions, i.e. in 2019 and 2020. Evidence discovered during the search revealed that the resort’s construction began in 2017 and that more than Rs. 6 crore was spent in cash on the resort’s construction. The cost of construction has not been accounted for in the books of either the person searched or the politician.

Over the last ten years, a search in the case of the State Government official has revealed that he, his family members, and relatives have amassed vast wealth in the form of properties in prime locations in Pune, Sangli, and Baramati. The family owns one bungalow and one farm house in Pune, one lavish farm house in Tasgaon, two bungalows in Sangli, two commercial complexes with Tanishq and Carat lane showrooms, five flats in various locations in Pune, one flat in Navi Mumbai, vacant plots in Sangli, Baramati, and Pune, and more than 100 acres of agricultural land acquired over the last seven years. A thorough investigation into the sources of the properties’ acquisition and the amounts spent on the opulent interiors of shops and bungalows is currently underway. The family owns a variety of businesses, including electronic product showrooms, Tanishq showrooms, civil construction, real estate, and pipe manufacturing.

It was discovered that the construction company, which was run by the employee’s relatives, received numerous contracts from the State Government. The search operation also uncovered evidence of contract expense inflation through bogus purchases and bogus sub-contracts totaling Rs. 27 crore. Evidence of an unaccounted cash receipt of Rs. 2 crore in connection with the sale of land in Baramati has also been discovered. Further investigation into tax evasion in the construction industry is underway.

A total of Rs. 66 lakh in cash was seized as a result of the search. Digital data and documentary evidence seized during the search operation are being analysed further, and additional investigations are underway.