The Income Tax searches conducted recently on irrigation contractors and an individual who is a close aide of the former Chief Minister B.S. Yediyurappa and his family have not only led to the detection of about ₹750 crore undisclosed income but also the modus operandi carried out by contractors to suppress income through bogus dealings.
“Out of the aggregate amount of ₹750 crore, ₹487 crore has been admitted by the respective group entities as their undisclosed income,” a Ministry of Finance release on Tuesday stated. The release did not identify the contractors and individuals who were searched on October 7.
Political links
While the I-T Department had also not revealed the identity, Mr. Yediyurappa and his family members had acknowledged that Umesh, a BMTC employee on deputation to the Chief Minister’s office, had worked for them. Mr. Umesh is alleged to have facilitated some of the irrigation and highway contracts during the tenure of Mr. Yediyurappa as Chief Minister. In the past, Mr. Umesh had worked with Ayanur Manjunath, Shivamogga MP B.Y. Raghavendra and BJP vice-president B.Y. Vijayendra.
In all, 47 premises, spread across four States and belonging to three Bengaluru-based major contractors executing irrigation and highway projects, were searched.
During the search, unaccounted cash of ₹4.69 crore, unaccounted jewellery and bullion valued around ₹8.67 crore, and silver articles valued around ₹29.83 lakh have been seized, stated the release. The searches led to various incriminating evidences in the form of physical documents and digital evidences have been found and seized, the release added.
Bogus purchases
The search operation also found that the three groups were involved in suppression of their income by resorting to bogus purchases, inflation of labour expenses, booking of bogus sub-contract expenses, and others. The investigation revealed that one of the groups had booked bogus sub-contract expenses in the name of about 40 individuals of no means and unconnected to the construction business. “Upon enquiry, these individuals admitted to the said manipulation,” according to the release.
It said that one of the groups admitted to having indulged in inflation of labour expenses amounting to ₹382 crore while another group has been found to have taken accommodation entries from non-existing paper companies to the extent of ₹105 crore, which has been admitted by the group.
