Rs 281-crore slush funds racket busted in MP, I-T says funds went to 'major political party HQ in Delhi'

The Income Tax Department on Monday said it has detected a "wide spread and well organised racket" of collection of unaccounted cash of about Rs 281 crore through various persons in different walks of life, including business, politics and public service. 

"A part of the cash was also transferred to the headquarter of a major political party in Delhi, including about Rs 20 crore, which was moved through hawala recently to the headquarter of the political party from the residence of a senior functionary at Tughlak Road, New Delhi," the Central Board of Direct Taxes said. 

It, however, neither identified the political party nor the senior functionary.

The statement added that records of collection and disbursement of cash "in the form of hand written diaries, computer files and excel sheets were found and seized and it corroborates the above findings". 

It added that the searches in Delhi in the group of a close relative of the senior functionary have further led to the seizure of "incriminating evidence, including cash book recording unaccounted transactions of Rs 230 crore, siphoning off money through bogus billing of more than Rs 242 crore and evidence of more than 80 companies in tax havens." 

The tax department also said it has recovered Rs 14.6 crore of "unaccounted" cash and seized diaries and computer files of suspect payments in raids against close aides of Madhya Pradesh Chief Minister Kamal Nath and others.

The CBDT said the department has also detected a trail of Rs 20 crore suspect cash allegedly being moved to the "headquarter of a major political party in Delhi".

"Rs 14.6 crore of unaccounted cash has been found so far, besides 252 bottles of liquor, few arms and tiger hide-skins," the CBDT said in a statement. 

The department had Sunday launched pre-dawn raids at 52 locations of people and associates linked to Nath.

Sources had told PTI that there is a "strong possibility" of the cash recovered during the operation being used as an election inducement to fund political campaigns and bribe voters in the poll-bound state and in Delhi.

A preliminary report of the raids has also been shared by the department with the CBDT and the Election Commission in Delhi.

A cash van with large-sized trunks has been sent by the department at a location in Bhopal to seize and collect the cash found during the raids, they said.

Those searched included Nath's former Officer on Special Duty (OSD) Pravin Kakkar, former adviser Rajendra Miglani, Ashwani Sharma and executives linked to his brother-in-law's firm Moser Bayer and a company of his nephew Ratul Puri.

Nath had reacted late Sunday to the development.

"The situation about the I-T raids is not clear yet. It would be appropriate to speak on this after the situation is clear. But the entire country knows how the constitutional institutions were used and against whom they were used during the past five years," he had said.

"These institutions were used to scare people. When they do not have anything to say on development and their work, they used this kind of tactics against their opponents," the CM's statement had said.