Income Tax Department conducts search operations on a real estate group in Mumbai and Navi Mumbai

The Income Tax Department launched a search and seizure operation against a real estate group involved in the construction of residential and commercial projects in Mumbai and Navi Mumbai on November 25, 2021. The majority of the work done by the organisation is in the establishment of slum redevelopment initiatives. A total of 30 locations were searched throughout the operation.

The search operation uncovered the group’s many tactics of tax avoidance. Several documentary and digital evidences have been discovered and confiscated that show receipt of cash in the amount of Rs.100 crore as part of the consideration for the sale of flats, which is not accounted for in the regular books of account. The fact that such transactions resulted in the receipt of on-money is also supported by statements made during the search. The group’s method of operation entails providing promissory notes to consumers that are equal to the on-money component, and these promissory notes are destroyed after the flat is registered.

Unaccounted cash payments made not only to the original occupants of the slums for vacating the dwelling unit, but also to other persons for aiding slum inhabitants’ vacation of the properties have been discovered and seized. Further evidence of inconsistencies and violations of Slum Rehabilitation Authority (SRA) norms has been discovered.

The preliminary examination of the evidences revealed that the organisation purchased a controlling position in a corporation in exchange for cash. There were also failures to comply with the provisions of tax deduction at source. The assessee group did not deduct tax at source on some payments totaling more than Rs. 300 crore that it claimed.

Unaccounted cash worth over Rs. 6.00 crore was confiscated as a result of the search.