I-T raids on real estate group unearth sham transactions worth ₹700 crore
Over 40 premises in Mumbai, Pune searched
The Income Tax department continued its search and seizure operations for the fourth day against four leading developers on Friday. The searches across more than 40 premises across Mumbai and Pune led to recovery of “evidence related to receipt of ‘On Money’ sale of commercial and residential blocks, bogus unsecured loans taken, bogus long term capital gains and various other sham transactions to evade income aggregating to about ₹700 crore,” according to a statement issued by the Press Information Bureau.
Sources in the Income Tax department, and from the industry, confirmed that real estate developer group Hub Town Ltd., formerly Akruti City Ltd., is at the centre of the searches.
A senior I-T official from New Delhi confirmed that searches began at offices of Hub Town and extended to joint venture partners including Andheri-based Atul Projects, Wadhwa Group and Radius Developers. “The four are connected through joint venture agreements. The searches were approved under section 132/133 of the IT Act,’’ according to the senior I-T official.
However, while a Radius Developers spokesperson categorically denied any action against their company, a senior executive of the Wadhwa Group declined to comment.
The I-T official said, “One of the builders is based out of Andheri and has JVs in most of the six projects Hub Town is constructing across the city, including a multi-storey project called 25 South at Prabhadevi. This is the overall result of the liquidity crunch in the market and there is growing tendency of hiding taxes.”
Calls and text messages to Vimal Shah, managing director, Hub Town yielded no response till the time of going to press.
According to the PIB statement, the search operations have unravelled peculiar transactions wherein by way of accounting jugglery, income on transactions worth ₹525 crore has been evaded.
“ ‘On Money’ receipt on sale of Residential/Commercial Blocks amounting to ₹100 crore has been corroborated during the search. During the search, incriminating evidence was unearthed pertaining to modus operandi establishing the introduction of accommodation loans by the group, which have been found to be bogus. Moreover, use of entry providers/hawala operators for entries of Long Term Capital Gains by the promoters of this real estate group have been affirmed during the search action. The action has also resulted in detection of jewellery worth approximately ₹14 crore, which is under verification,” according to the statement issued by PIB.