Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

New Delhi, 11th November, 2019

PRESS RELEASE

Income Tax Department busts a major racket of bogus billing & hawala transactions

Income Tax Department carried out searches in the first week of November, 2019 on a group of persons indulging in issuing bogus bills and carrying on hawala transactions. The search operations covered 42 premises across Delhi, Mumbai, Hyderabad, Erode, Pune, Agra & Goa.

The search operations resulted in busting of a major racket of cash generation by leading corporate houses in the infrastructure sector through bogus contracts/bills. Funds meant for public infrastructure projects were siphoned off through entry operators, lobbyists and hawala dealers. The companies involved in siphoning of funds are mostly located in NCR and Mumbai. One such company was earlier searched by Income Tax Department in April, 2019.

The projects involved in bogus billings are major infrastructure and EWS projects located in Southern India. Evidence of cash payment of more than ₹ 150 crore to a prominent person in Andhra Pradesh has also been unearthed during the search.

The search action was successful in unearthing incriminating evidences and establishing the nexus between big corporates, hawala operators and identification of entire chain of delivery, as well as siphoning of funds by way of bogus contracts to the tune of ₹ 3300 crore. Unexplained cash of ₹ 4.19 crore and jewellery in excess of ₹ 3.2 crore was also seized during the search operation.

(Surabhi Ahluwalia)

Commissioner of Income Tax

(Media & Technical Policy)

Official Spokesperson, CBDT.

Bogus billing and hawala transactions exposed leading corporate-linked diversion of infrastructure project funds; enforcement uncovered intermediary networks. A coordinated enforcement operation uncovered a large-scale scheme of bogus billing and hawala transactions in the infrastructure sector, where fraudulent invoices and intermediary networks of entry operators, lobbyists and hawala dealers were used to divert funds intended for public infrastructure and EWS projects; searches and seizures documented the chain of delivery, cash disbursements, unexplained assets, and the mechanism of siphoning funds through artificial contracts.