Unaccounted income of more than Rs 2,000 crore was detected in Telangana and Andhra Pradesh during the searches conducted by the Income Tax Department last week, officials said on Thursday.
The IT sleuths carried out search and seizure at more than 40 premises in Hyderabad, Vijayawada, Kadapa, Vishakhapatnam, Delhi and Pune on February 6. The search action included three prominent infrastructure groups based in Andhra Pradesh and Telangana, said a spokesperson of the Central Board of Direct Taxes (CBDT).
Investigations led to busting of a major racket of cash generation through bogus sub-contractors, over-invoicing and bogus billing. Several incriminating documents and loose papers were found and seized during the search, apart from emails, WhatsApp messages and unexplained foreign transactions unearthed during the search, said an official release.
Search operation was also carried out on close associates including the ex-personal secretary of a prominent person and incriminating evidence seized. The search operations revealed that infrastructure companies had subcontracted work to several non-existent/bogus entities, the official said.
Preliminary estimates suggest siphoning of more than Rs 2,000 crore through transactions that were layered through multiple entities with the last in the chain being small entities with turnover less than Rs 2 crore to avoid maintenance of books of accounts and tax audits etc. Such entities were either not found at their registered address or were found to be shell entities. Several such sub-contractors were controlled by the principal contractors with all their ITR filings and other compliances being done from the IP addresses of main corporate office.
FDI receipts of several crores in the group companies of one of the Infrastructure companies is suspected to be round-tripping of its unaccounted funds. Unexplained cash of Rs 85 lakh and jewellery worth Rs 71 lakh have been seized. More than 25 bank lockers were restrained, the official added.