IT Department Conducts Search Actions in Karnataka; Detects Unaccounted Income of Rs.1300 crore

IT Department Conducts Search Actions in Karnataka; Detects Unaccounted Income of Rs.1300 crore Income Tax Department initiated Search & Seizure actions on 20.10.2022 and 02.11.2022 on certain individuals who had executed Joint Development Agreements (JDAs) with various real-estate developers. The search action covered more than 50 premises spread across Bengaluru, Mumbai and Goa. Many incriminating pieces of evidence, including documents and digital data, have been discovered and taken throughout the course of the search activities. Additionally taken were documents related to the selling agreements, development agreements, and occupancy certificates (OCs). Despite receiving OCs from the authorities, these evidences showed that the landowners had not disclosed revenue they received from capital gains on the transfer of the land given to various developers through JDAs for development. Additionally, it was discovered that landowners frequently hid the entire value of the consideration paid for transfer land and fraudulently inflated the cost of acquisition and other charges in order to reduce their income from capital gains for a number of years. Additionally, it was discovered that some of the landowners failed to file their ITRs for several years during which they were entitled to capital gains income. When challenged, the affected assessees recognised their mistakes and consented to reveal any income from capital gains found in their individual circumstances and pay the applicable taxes. So far, the search actions have led to detection of unaccounted income of more than Rs. 1300 crore. Further, undisclosed assets in the nature of cash and gold jewellery worth more than Rs. 24 crore have also been seized. Further investigations are in progress.