Income Tax Department started a Search and Survey action on 22.12.2020 in the cases of three leading contractors of North Eastern India. One of the groups is also into Hospitality business. The Search and Survey actions are being carried out at 14 locations in Guwahati, Delhi, Silapathar and Pathsala (Assam).

The main allegations against the three groups are that they have taken accommodation entries in the form of non genuine unsecured loans and also securities premium from dubious Kolkata based shell companies. The three groups have suppressed their net profits across the years and routed back into business the unaccounted income through entry operators based out of Guwahati and Kolkata.

During the course of Search actions, it has been established that the shell companies from which loans/ premium had been taken exist only on paper and have no real business and creditworthiness. The entry operators,  on being questioned, have admitted that the unsecured loans/share premium from the shell companies to the groups are non-genuine and bogus. Evidences of the cash trail of routing of funds through Securities premium was unearthed during search. It has been established that amounts to the tune of about  ₹ 65 crore were routed back into regular books involving Shell companies which actually represent unaccounted income of the group. Further investigation is on to detect the actual quantum involved in tax evasion using this modus operandi.

It has been gathered during the Search action that one of the groups engages in huge cash transactions in hospitality business of proportions as high as 50%, which is under examination. It has been further gathered that some of the entities of the groups engage in purchases of Jewellery in cash. The source of the cash purchases are under examination.

Till now, Jewellery to the tune of ₹ 9.79 lakh has been seized. The sources of acquisition of remaining Jewellery found exceeding ₹ 2 crore are under verification. Cash of ₹ 2.95 crore has also been seized. Overall, undisclosed income to the tune of approximately ₹ 100 crore has been unearthed so far during the Search and Survey operation. One locker has been found, which is yet to be operated.

Further investigations are under progress.

Accommodation entries used to conceal business receipts uncovered; searches reveal bogus shell transactions and ongoing probe. Coordinated search and survey operations targeted three contracting groups for alleged accommodation entries via non genuine unsecured loans and inflated securities premium from paper shell companies, with entry operators admitting bogus transactions. Searches uncovered cash trails, seizures of cash and jewellery, substantial detected undisclosed income, and ongoing investigation to determine sources, asset holdings, and the quantum of tax evasion.