Income Tax Department conducts a raid on prominent real estate firm in Mumbai, Pune and identifies Rs 700cr as black money.

By Abhay Shah, Realty Quarter

On 2nd of August, the income tax department disclosed raids on 40 premises of a real estate firm based in Mumbai claiming to have detected Rs 700 Crore worth of tax deception.

The Central Board of Direct Taxes (CBDT), which frames tax policy, issued a declaration saying that the operation took place on July 29 in a “prominent group engaged in the real estate development” and it’s Mumbai and Pune premises were searched. Although the CBDT declaration did not recognize the group, official sources said that it was the Hubtown group.

In the search operation, the department uncovered evidence of receipt of “On Money” on sale of the commercial and residential blocks, bogus unsecured loans taken, bogus long-term capital gains (LTCG) and other sham transactions, to avoid income of approximately Rs 700 crore, according to the declaration.

“The search action unravelled strange transactions in which income from transactions worth approximately Rs 525 crore was excluded by accounting jugglery,” it said.

During the search, the declaration stated that ‘On Money’ receipt for residential and commercial blocks worth Rs 100 crore was substantiated.

During the search, the CBDT stated that “incriminating” proofs were discovered concerning the modus operandi of the group’s loan establishment, which was identified to be fake.

In addition, during the search, it was stated that the use of entry providers and hawala operators for LTCG entries by the promoters of this real estate group was confirmed. The action also led in the identification of jewellery worth approximately Rs 14 crore, which are under review, the CBDT said and added that the searches are still underway.