I-T Dept’s Charges Against Sonu Sood: ‘Rs 20 Cr Tax Evasion, FCRA Breach, Bogus Billing’

In a statement, the income tax dept also said Sonu Sood's charity foundation collected Rs 18.94 crore in donations since April 2021, spent Rs 1.9 cr on relief work. Rs 17 cr lying unutilised in bank

Actor Sonu Sood

Mumbai: Actor Sonu Sood and his aides have evaded taxes over Rs 20 crore, the income tax department said in a statement on Saturday after searching the actor’s Mumbai home for three days. 

Sood, 48, recently announced a partnership with Arvind Kejriwal's Aam Aadmi Party government in Delhi.

According to the tax department, Sood's non-profit organisation also raised Rs 2.1 crore from overseas donors using a crowdfunding platform, in breach of the Foreign Contribution (Regulation) Act, which oversees such transactions.

It said a charity foundation incorporated by the actor in July last year has collected Rs 18.94 crore in donations since April 2021, of which Rs 1.9 crore has been spent towards relief work, while the rest of the Rs 17 crore is lying unutilised in the foundation’s bank account.

According to the Central Board of Direct Taxes (CBDT), incriminating material relating to tax evasion was found during the search on the residential premises of the actor and his aides.

Total 28 premises spread over Mumbai, Lucknow, Kanpur, Jaipur, Delhi, and Gurgaon have been covered in the search operation. 

Sonu Sood could not be immediately reached for his comments.

‘Incriminating evidence pertaining to tax evasion’

In its statement, the I-T department said: "During the course of search at the premises of the actor and his associates, incriminating evidences pertaining to tax evasion have been found. The main modus operandi followed by the actor had been to route his unaccounted income in the form of bogus unsecured loans from many bogus entities. Investigations so far have revealed use of twenty such entries, the providers of which, on examination, have accepted on oath to have given bogus accommodation entries. They have accepted to have issued cheques in lieu of cash.”

It added: "There have been instances where professional receipts have been camouflaged as loans in the books of accounts for the purpose of evasion of tax. It has also been revealed that these bogus loans have been used for making investments and acquiring properties. The total amount of tax evaded unearthed so far, amounts to more than Rs. 20 crore." 

The department, which is still conducting the search operations and investigations, said Sood has invested substantial funds in an infrastructure group in Lucknow for a joint venture real estate project, and that irregularities have been found in the account books of the group.  

"The simultaneous search operations carried out at various premises of an Infrastructure group in Lucknow in which the said actor has entered into a joint venture real estate project and invested substantial funds, have resulted in unearthing of incriminating evidences pertaining to tax evasion and irregularities in the books of account," said the I-T department. 

Cash of Rs 1.8 crore has been seized during the search, and 11 lockers have been placed under prohibitory orders.

"The search has revealed that the said Group is involved in bogus billing of subcontracting expenses and siphoning off of funds. Evidences of such bogus contracts found so far are to the tune of over Rs. 65 crore. Evidence of unaccounted cash expenses, unaccounted sale of scrap and digital data evidencing unaccounted cash transactions has also been found. Further, it has been unearthed that the said Infrastructure Group/company has entered into dubious circular transaction to the tune of Rs. 175 crore with an infrastructure company based in Jaipur. Further investigations are being carried out to establish the full extent of tax evasion," the department said in the statement. 

Kejriwal Defended Sood

The actor came into the limelight when he helped thousands of immigrants to reach their homes after the government imposed a lockdown in March 2020 in the wake of the Covid-19 pandemic. 

Sood was recently named an ambassador for the AAP's student mentorship programme. The AAP has condemned the action against the actor, claiming that the government is singling him out because he is a "messiah" for the poor. 

Delhi Chief Minister and AAP leader Arvind Kejriwal tweeted in support of Sood, saying the Bollywood actor has the prayers of millions of families he has helped in difficult times.

According to the I-T Department, the Charity Foundation incorporated by the actor on July 21, 2020 has collected donations to the tune of Rs 18.94 crore from 01.04.2021 till date, out of which it has spent around Rs 1.9 crore towards various relief work and the balance of Rs 17 crore has been found lying unutilised in the bank account of the foundation to date.