IT Dept Seizes Rs 94 Cr Cash, Jewellery Worth Rs 8 Cr From Govt Contractors, Developers In Karnataka

The operation, executed by the Income Tax department, uncovered a staggering Rs 94 crore in unaccounted cash, as well as gold and diamond jewellery valued at over Rs 8 crore,

ncome Tax officials with cash recovered during tax evasion searches against some Karnataka-based contractors and persons linked to them, in Bengaluru, Friday, Oct. 13, 2023.

Source : PTI

The Income Tax department has seized Rs 94 crore in cash along with gold and diamond jewellery worth Rs 8 crore and 30 luxury watches following raids on government contractors and real estate developers in Karnataka and several other states, the Central Board of Direct Taxes (CBDT) revealed on Monday. The searches, which commenced on October 12, encompassed 55 premises across Bengaluru and several cities in neighbouring Telangana and Andhra Pradesh, in addition to the national capital, Delhi.

The operation, executed by the Income Tax department, uncovered a staggering Rs 94 crore in unaccounted cash, as well as gold and diamond jewellery valued at over Rs 8 crore, news agency PTI reported citing the statement.

Moreover, approximately 30 luxury wristwatches of foreign make were discovered during the raids, located in the residence of a private salaried employee unrelated to the watch trade. Notably, the accused parties were not identified in the official statement, as per PTI.

This operation has ignited a political clash in Karnataka, with the ruling Congress and opposition BJP trading allegations regarding the origin of the "unaccounted" cash. BJP's state president, Nalin Kumar Kateel, alleged that the seized money was linked to the Congress. However, Chief Minister Siddaramaiah has vehemently denied these allegations, dismissing them as baseless.

The CBDT, which formulates policies for the Income Tax department, reported the discovery of an abundance of "incriminating" evidence. This evidence took various forms, including loose sheets, hard copies of documents, and digital data, seized from the entities and their associates under scrutiny.

The uncovered "tax evasion" tactics point towards a scheme in which these contractors were engaged in inflating their expenses by falsely recording purchases and fraudulently claiming expenses with subcontractors, often for ineligible expenses, news agency PTI reported. The "irregularities" in the utilisation of contract receipts, as detected by the CBDT, have led to the generation of substantial unaccounted cash and the creation of undisclosed assets.

According to the CBDT, "Evidence indicating inflation of expenses in the form of discrepancies in goods receipt note (GRN) validation have been unearthed during the search, and evidence of huge discrepancies in documentation related to purchases booked and actual physical transport of goods have also been unearthed, with regard to bogus transactions with subcontractors, some of whom were also covered during the search." It further asserted that these contractors were expensing non-business-related items.

Moreover, the CBDT disclosed that evidence related to "liaison expenses" had been seized, along with the unearthing of large-scale unaccounted cash transactions that were not recorded in the account books. These transactions were discovered in the premises of the assessed individuals, subcontractors, and associates, including certain individuals responsible for handling cash.

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