The Income Tax Department carried out search and seizure operations in the case of three major contractors based out of Bengaluru engaged in the execution of irrigation and highway projects. The searches commenced on 07.10.2021 have been carried out at 47 premises spread across 4 states.

During the search action, it was found that these three groups were involved in suppression of their income by resorting to bogus purchases; inflation of labour expenses; booking of bogus sub-contract expenses etc. The investigation revealed that one of the groups has booked bogus sub-contract expenses in the name of about 40 individuals of no means and unconnected to the construction business. Upon enquiry, these individuals have admitted to the said manipulation.

One of the groups admitted to having indulged in inflation of labour expenses amounting to ₹ 382 crore. Further, another group has been found to have taken accommodation entries, from non-existing paper companies, to the extent of ₹ 105 crore, which stands admitted by this group.

Various incriminating evidences in the form of physical documents, digital evidences, etc. have been found and have been seized. During the search, unaccounted cash of ₹ 4.69 crore; unaccounted jewellery & bullion valued at ₹ 8.67 crore; and silver articles valued at ₹ 29.83 lakh have been seized.

The search & seizure actions in these three groups have resulted in detection of undisclosed income of about ₹ 750 crore. Out of this, aggregate amount of ₹ 487 crore has been admitted by the respective group entities as their undisclosed income.

Further investigations are in progress.

Undisclosed income uncovered through searches revealing bogus purchases, inflated labour costs and accommodation entries, prompting further probe. Searches of three Bengaluru contractor groups uncovered suppression of income through bogus purchases, inflated labour expenses, sham sub contracting in names of unconnected individuals, and accommodation entries from paper companies; physical and digital evidence plus unaccounted cash and valuables were seized, substantial undisclosed income was detected and partly admitted by the entities, and investigations continue.