New Delhi The Income Tax Department on Monday said it has detected undisclosed capital gains and alleged tax evasion in transactions involving two real estate developers in Bengaluru and Hyderabad.
The alleged irregularities came to light during a search operation conducted on two real estate groups engaged in the business of construction, sale and leasing of commercial and residential space, and educational and hospitality services. The search operation covered more than 40 premises located in Bengaluru, Hyderabad and Chennai.
The department alleged that incriminating documents and digital evidence were seized during the searches. Preliminary analysis of the evidence revealed that some of the land owners had entered into a joint development agreement with a developer from Bengaluru. He received super built-up area from the developer in lieu of the land given to the developer for the development of various projects. However, the land owners failed to declare the capital gains arising out of the transaction, though completion certificates have been obtained for the projects. The amount of such undisclosed capital gain estimated to exceed Rs. 400 crore, the department said.
Preliminary analysis of the seized documents revealed that these groups have allegedly concealed income of Rs. 90 crore in respect of identifiable revenue from the sale of units in immovable property, the department said.
Both the groups have reportedly invested Rs. 28 crore by claiming bogus purchases and by resorting to over-invoicing of construction material, the department said.
The department alleged that it has also been found that interest bearing loan money has been given by the principal entities of both the groups to the concerned parties for non-commercial purposes. In the case of a trust involved in the search operation, it is found that the trust has failed to utilize, within the specified permissible time limit, an accumulated amount of Rs. 40 crore for the specified purpose as per the items of the registered trust deed, the department said. Undisclosed cash recovered in raids so far 3.50 crore and jewelery Rs. 18.50 crore, the department said.