The Income Tax Department initiated search and seizure operations on a real estate group, engaged in the construction of residential and commercial projects, in Mumbai and Navi Mumbai Region on 25.11.2021. The group is mainly carrying out development of slum rehabilitation projects. The search action covered around 30 premises. 

The search action unearthed various methods of tax evasion adopted by the group. Several documentary and digital evidences have been found and seized demonstrating receipt of cash to the tune of ₹ 100 crore, as part of consideration on sale of flats, which is not accounted for in the regular books of account. The fact of receipt of on- money on such transactions is also corroborated in the statements recorded during the search proceedings. The modus operandi adopted by the group includes issuing of promissory notes equivalent to the on- money component to the customers and these promissory notes are destroyed after registration of the flat.

Incriminating evidence regarding unaccounted cash payments made not only to the original tenants of the slums for vacating the dwelling unit but also to some other persons for facilitating vacation of the properties by slum dwellers has been found and seized. Further evidences suggesting irregularities and violation of guidelines of Slum Rehabilitation Authority (SRA) have also been detected.

The preliminary analysis of evidences revealed that the group has acquired controlling stake in a company by paying consideration in cash. Defaults on compliances to the provisions of tax deduction at source have also been found. The assessee group did not deduct tax at source on certain payments claimed by it which aggregate to more than ₹ 300 crore.

As a result of the search action, unaccounted cash exceeding Rs. 6.00 crore has been seized.

  Further investigations are under progress.

Tax evasion probe uncovers off books cash receipts, destroyed promissory notes and TDS non compliance, triggering seizures and probe. Search and seizure operations on a real estate group uncovered documentary and digital evidence of systematic tax evasion involving receipt of unaccounted cash as consideration for flat sales, issuance and destruction of promissory notes to represent the unaccounted component, unaccounted payments to slum tenants and intermediaries, breaches of Slum Rehabilitation Authority guidelines, acquisition of company control with cash consideration, and significant defaults on tax deduction at source; unaccounted cash was seized and investigations continue.