India not a country of Poor: Know about the Income Tax Raids in Bihar & Uttar Pradesh


India not a country of Poor: Know about the Income Tax Raids in Bihar & Uttar Pradesh

India is not a country of Poor people & but so far a country of human driven systems. This is what every income tax & GST raid is revealing. One needs to know about the latest Income Tax Raids in Bihar & Uttar Pradesh. Similar observations were there in the earlier raids carried out by the Income Tax Departments in the past.  The fact is that the wealth is getting concentrated in the hands of few people by using fraudulent means. The revelations are shocking and one can now say that all means to evade tax would be more dangerous than it was in the past. It is not only the person on whom search is carried out who will be affected but the chain of the entire group of people involved in the process will be severely affected by the process. This is the time to move clean with peace of mind by paying due share of taxes to the Government Treasury.

Let us know about the raid of Bihar & Uttar Pradesh.

 Government of India
Department of Revenue
Ministry of Finance
Central Board of Direct Taxes

New Delhi, 30th October, 2020


Income Tax Department conducts searches in Bihar

The Income Tax Department has carried out searches on 29.10.2020 in the cases of four prominent contractor groups based in Patna, Bhagalpur, Hilsa, and Katihar. In addition, surveys have been conducted on some traders of mined rocks in Gaya.

All the four groups have been found to have been evading taxes by inflating expenses for the supply of material and labour.

In one case payments have been made to various parties without any evidence of having received any services or supplies. Payments made to bogus parties are received back as an unsecured loan or sometimes withdrawn in cash. Such loans are of about Rs. 10 crore. Further, substantial bogus purchases have been debited in the books. These parties do not exist, but are shown as ‘creditors’ in the books. Such creditors amount to about Rs. 20 crore. Further, bank documents, accounts and other incriminating material of some bogus parties have been seized from the premises of the assessee. These documents and consequential field investigations clearly show that the parties are not genuine and bank accounts have been opened and are being operated by the assessee only. The cash generated has been used in acquiring properties etc.

Seized documents in another case also show that the payments for inflated expenses are being made by bearer cheques. These payments are withdrawn from the bank account by the assessee’s own persons. Such amounts are being quantified. There are sundry creditors for unpaid labour of about Rs 15 crore. These have also been found to be bogus during the search.

There are documents showing inflation of expenses of about Rs 15 crore in another group. This group has made investments in properties in Bihar, Orissa, and Madhya Pradesh.

In another case, evidence of payments made for bogus purchases through cheques but received back in cash has been seized. The cash generated has been invested in purchasing properties and construction of a commercial building. Evidence of such concealment of income of about Rs. 10 crore, using this modus operandi, has been found.

Various incriminating documents, including diaries, purchase deeds, documents showing receipts and payments in cash have been seized.

During surveys also, evidences of unaccounted cash entries, unaccounted sales and purchases have been found totalling to more than Rs. 8 crore. In addition, sales and purchases of stone etc have been found to be not recorded in the books of accounts.

During the search, cash totalling upto Rs 3.21 crore has been seized. Fixed deposits of Rs. 30 crore have been placed under prohibitory orders. Further, properties worth Rs. 16 crore are being placed under prohibitory orders.

The searches have led to unearthing of unaccounted income of about Rs. 75 crore, so far. Further investigations are continuing.

(Surabhi Ahluwalia)
Commissioner of Income Tax
(Media & Technical Policy)
Official Spokesperson, CBDT

Ministry of Finance

Income Tax Department conducts searches in Uttar Pradesh

A search action was started by the Income Tax Department on 28.10.2020 in the case of a Bijnor based group engaged in real estate business and it’s associates. There were allegations that the group companies were having huge security premium reserves and massive liabilities in the form of loans and advances from related parties/others and other payables, even then they had advanced substantial loans to others. The sales of the group were not commensurate with the loans and advances shown.

During the search unexplained cash of more than Rs. 50 lakhand unexplained jewellery weighing approximately 2.5 kg has been found, so far.The allegations regarding share premium have been found to be correct during the search. They are not commensurate with the income of the concerned shareholders, who could not explain their sources.

During the search, more than 20 companies were found to be running from a single premise out of which many companies are dummy companies and do not show any operations. Companies are not having any worth but are showing significant amounts of share premium. The dummy companies are being used as conduit for layering of funds.

One of the group members has financial interest in one UK based foreign company and one property in London, the sources of investment therein are being examined. Apart from this, incriminating documents relating to investments in many properties have also been recovered from several premises and the same are being investigated. The sources of investment in properties owned by the group are being verified. Hand-written papers relating to certain payments/receipts have also been found during the search and are being examined.

So far 6 bank lockers have been found and further investigations are going on.