On July 6, the Income Tax Department conducted a search and seizure operation on a Hyderabad-based gang. Real estate, construction, waste management, and infrastructure are all businesses that the company is involved in. Waste management activities are dispersed over India, whereas real estate industries are primarily focused in Hyderabad.
Many damning documents, loose sheets, and other items were confiscated during the search and seizure operation, confirming the group’s involvement in unaccounted transactions. During FY 2018-19, it was discovered that the group had sold a majority stake in one of its group operations to a non-resident corporation domiciled in Singapore, earning enormous capital gains. Following that, the group designed various colorable schemes by entering into a series of share purchase/sale/Non arm’s length valued subscription and subsequent bonus issuance with connected parties, resulting in a loss that was offset against capital gains earned.
Furthermore, it was discovered during the investigation that the assessee had improperly reported bad debts totaling Rs. 288 crore on related party transactions, which was offset against the aforementioned profits made. During the search, incriminating papers connected to this false/false claim were discovered. During the search, unaccounted cash transactions with the group’s associates were discovered, and the volume and modus of the transactions are being investigated.
The entities and associates have admitted to having unreported income of Rs. 300 crore and have agreed to pay necessary taxes as a result of the search and seizure operation and the various incriminating papers discovered.
Further investigations are in progress.