Tamil Nadu: I-T dept raids in SEZ case unearths undisclosed income of over Rs 450 cr

New Delhi [India], November 29 : The Income Tax department conducted searches at the premises of the former director of an Information Technology Special Economic Zone (IT SEZ) developer and unearthed unaccounted assets worth about Rs 100 crore accumulated by him and his family members in the past three years, officials said on Sunday.
According to officials, the raids were carried out on November 27 in the case of an IT SEZ developer, its former director and a prominent stainless-steel supplier at 16 premises located in Chennai, Mumbai, Hyderabad and Cuddalore.
"The evidence unearthed include unaccounted assets worth about Rs 100 crores accumulated by the former director and his family members in the past three years. The search further unearthed that the IT SEZ developer claimed bogus work-in-progress expenses of about Rs 160 crores in an under-construction project," the Ministry of Finance said in a statement.
It said that the entity had also claimed capital expenses of around Rs 30 crores on account of bogus consultancy fees in an operational project and inadmissible interest expenses to the extent of Rs 20 crore was also claimed by the entity. It added that the searches so far have resulted in the detection of undisclosed income of more than Rs 450 crore.
"The search further revealed certain share purchase transactions relating to the IT SEZ developer. The shares of this entity were sold by its erstwhile shareholders, a resident and a non-resident entity, which routed its investment through a Mauritius intermediary, for about Rs 2,300 crore in FY 2017-18 but capital gains out of this sale transaction were not disclosed to the department," the statement said.
"The investigation is in progress to determine the undisclosed capital gains in the hands of both the shareholders. Other land transactions involving cash payments and an issue relating to Compulsory Convertible Debentures are also under examination," it added.
The statement said that the evidence found in the premises of the stainless-steel supplier revealed that the supplier group has been conducting three sets of sales -- accounted, unaccounted and partly-accounted.
"The unaccounted and partly-accounted sales amount to more than 25 per cent of the total sales each year. Further, the assessee group has provided sales accommodation bills to various customers and received commissions of more than 10 per cent on these transactions," it said.
The Ministry, in its statement, said that while the quantification of unaccounted income is being carried out currently, it is estimated to be around Rs 100 crore.
"The related concerns of the assessee group are involved in financing, money lending and real estate development. The unaccounted transactions conducted by these entities and the unaccounted capital/loan infusion in these entities are estimated to be around Rs 50 crores," the statement further said.