Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

New Delhi, 11th June, 2019

PRESS RELEASE

Income Tax Department strikes again in J&K Region

The Income Tax Department conducted search and seizure operations on 11.06.2019 on a prominent business group based in Srinagar, covering 8 premises in Srinagar and 1 each at Bangalore and Delhi. The assessee group is engaged in the business of transportation, manufacturing of silk yarn, hospitality, retail trading of Kashmir Arts & Crafts etc.

None of the members of the group is regular in filing their Income Tax Returns. As a one time settlement, the group has got their loans of ₹ 170 crore with J&K Bank restructured for a sum of ₹ 77 crore, out of which, payment of only ₹ 50.34 crore to the J&K Bank has been made so far and balance of ₹ 27.66 crore is yet to be paid. During the search, evidence has been detected indicating that the one time settlement of the loan from J&K Bank has been done through the active connivance of a senior J&K Bank officer who was receiving several out of turn promotions. Furthermore, evidence has also been unearthed indicating that the repayment of ₹ 50.34 crore pertaining to the said loan has been greenfielded by the J&K Bank by granting loan of similar amount to an associate who has confessed to his role in layering the entire transaction.

During the search, incriminating evidence has also been found relating to:

• sale of undisclosed property amounting to ₹ 22 crore.
• agreement to sell Transport business for ₹ 9.10 crore.
• undisclosed profit of ₹ 15-20 crore on account of sale of Cold Storage plant at Lassipora. The cost of this project was found to have been inflated to ₹ 47 crore instead of the actual cost of ₹ 17 crore, for claiming more subsidy from the government by raising inflated and bogus bills. The loan for this project was taken from J&K Bank.
• undisclosed properties at Sonmarg (₹ 2.68 crore), Pahalgam (₹ 3.55 crore) and Bangalore (₹ 1.00 crore).
• one shop in partnership in Delhi purchased for ₹ 1.02 crore.

During the search, digital evidence found has been seized, analysis of which is in progress.

(Surabhi Ahluwalia)

Commissioner of Income Tax

(Media & Technical Policy)

Official Spokesperson, CBDT.

Tax search and seizure uncovers undeclared assets and alleged bank collusion, revealing inflated project costs and layered transactions. Income Tax Department search and seizure uncovered systematic non filing, a loan restructuring with a regional bank effected through alleged bank officer connivance and repayment layering via an associate, alongside undisclosed property sales, an agreement to sell a business, inflated project costs to claim subsidy through bogus bills, and seizure of digital evidence now under analysis.