Income Tax Department Conducts Search Operation on Automobile Manufacturing and Real Estate Group

On 23.03.2022, the Income Tax Department launched a search and seizure operation on a leading vehicle manufacturer group, a company operating chartered flights, and a Delhi-NCR real estate group spanning more than 35 properties across Delhi-NCR.

Various incriminating documents and digital evidence were discovered and confiscated during the search operation, demonstrating that the expenses apparently claimed for business purposes are not entirely supported by proof. More than Rs.800 crore in expenditure has been recorded under the pretence of purchasing services from a certain event management business. This entity has sucked off the funds by stacking. According to the requirements of the Income-tax Act of 1961, such claims for non-business purposes are inadmissible expenditure.

During the investigation, it was discovered that 10 acres of farm land in Delhi had been purchased by a few paper businesses. Unaccounted cash components totaling more than Rs.60 crore were allegedly engaged in such transactions. A major member of the automobile industry group is the ultimate/true benefactor of the land deal. The intermediary who arranged the aforementioned transaction confirmed in his statement that the majority of the sale consideration was paid in cash.

Aside from that, various damning documents have been discovered on the premises of real estate professionals. These are records of on-money transactions in which cash was received in place of unit sales in their numerous real estate projects throughout Delhi.

Evidence of bogus expenses and non-recognition of income totaling over Rs.50 crore, rotation of funds and suspicious loans through a dubious NBFC floated by a key person, layering and re-routing of funds through paper companies, and claiming bogus interest expenses, among other things, have been unearthed in the case of the company operating chartered flights.

Undisclosed cash in excess of Rs.1.35 crore has been seized, and jewellery in excess of Rs.3 crore has been temporarily restrained.

More research is being conducted.