I-T Officials Raid BMC Contractors, Unearth Rs 735 Crore Financial Irregularities

Amid ongoing logjam over government formation in Maharashtra, the Income Tax Department conducted raids at several locations and unearthed alleged irregularities to the tune of Rs 735 crore. The raids were conducted on civil contractors who work for the Brihanmumbai Municipal Corporation (BMC). The BMC is currently ruled by Shiv Sena, which recently decided not to form government in the state after its ally BJP refused to accept 50:50 formula for the chief ministerial post.

The search and survey by I-T sleuths were conducted at 44 locations in Mumbai and Surat on November 6. “37 premises were covered under search action and 7 premises were covered under survey,” ANI reported.

The search was conducted on entry providers and beneficiaries who have been engaged in execution of civil contracts mainly in Brihanmumbai Municipal Corporation (BMC), the Central Board of Direct Taxes (CBDT), the policy-making body for the tax department, said on Thursday.

“There were reports that certain contractors had taken entries in the form of loans among others from entry providers and also inflated expenses in the books of accounts to suppress income. Incriminating evidences showing large scale tax evasion and money laundering have been found,” it said.

So far, it said, detection on account of above-mentioned issues is to the tune of Rs 735 crore and extent of accommodation entries is being quantified.

The operation “also led to the detection of the use of bogus companies (floated by entry providers) for giving entries to businesses in the form of loans or bills for expenses, among others”.

“In the case of the entry providers, systematic modus operandi of bank fraud and forgery has been detected whereby the promoters have made investments in immovable properties and shares of group companies by siphoning off the bank loans,” it said.?

In the case of the contractor groups, several instances about inflation of expenses by bogus purchases/sub-contracts and taking of loans from entry providers have been identified, the statement claimed.?

Investigations are in progress, including identification of the remaining beneficiaries, the CBDT said.

With PTI Inputs