Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

New Delhi, 27th June, 2019

PRESS RELEASE

Income Tax Department continues to strike in J&K Region

The Income Tax Department conducted search and seizure operations on 27.06.2019 on a prominent business group based in Srinagar, covering 4 premises in the Kashmir Valley and 6 places in the Jammu region. Apart from the premises in J&K, 10 other business premises situated in Ludhiana, NCR and Jammu belonging to parties that have actively assisted the main tax evader in concealing his income and indulging in illegal activities have also been covered under survey action. The group is engaged in the business of real estate and information technology. There were allegations of large scale diversion and misappropriation of loan taken from J&K Bank by the group.

During the search, it was detected that the tax evader has been given illegal benefit of ₹ 60crore by J&K Bank. His outstanding loan of ₹ 190crore was settled at ₹ 130crore, although he did not deserve any concessional treatment. Additionally, even the reduced bank liability has either been defaulted by him or the repayment has been facilitated by active connivance of bank officials, who have ever greened his loan account by lending to third parties, who, in turn, gave their loaned funds to the tax evader through dubious financial transactions with him.

During the search operation, evidence was found that the main promoter was a director in a Dubai based company. He is also holding and operating a foreign bank account. Neither his interest in the Dubai Company nor the foreign bank account has ever been disclosed by him in his tax returns. He is likely to face action under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 as well as other relevant laws of the land for deliberate omission to declare foreign investment as mandated by law.

Field enquires have also revealed that the tax evader has sold/booked part of his real estate project of Paradise Avenue near Jammu against unaccounted cash. The cash component has neither been disclosed in tax returns by purchasers of the flats of Paradise Avenue nor has he disclosed these receipts in his books of accounts.

Other than the Paradise Avenue project, the tax evader has also undertaken real estate transactions in his personal capacity or in the name of family members wherein allegedly more than ₹ 7 crore of unaccounted cash has changed hands.

During the demonetisation period, the group had made cash deposits of ₹ 1.44 crore. The main promoter could not explain the source of these cash deposits during the course of search action.

(Surabhi Ahluwalia)

Commissioner of Income Tax

(Media & Technical Policy)

Official Spokesperson, CBDT.

Undisclosed foreign assets prompt tax enforcement action after searches revealing concealed income and alleged bank collusion. Search and seizure operations alleged income concealment, diversion and misappropriation of loan proceeds, and receipt of unaccounted cash in real estate transactions; bank conduct reportedly facilitated concessional settlement and evergreen lending benefiting the promoter. The promoter's undisclosed foreign directorship and foreign bank account were found, exposing him to action under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 and other applicable laws for non declaration of foreign assets and undeclared cash receipts.