The Income Tax Department carried out search and seizure operations on 25.02.2022 on certain contractors executing contracts of Brihanmumbai Municipal Corporation (BMC), a prominent person and their close associates. In all, more than 35 premises in Mumbai have been covered during the search operation.

During the course of the search operation, numerous incriminating documents, loose sheets and digital evidences have been found and seized. The evidences so seized strongly indicate a close nexus between these contractors and the said person. Particulars of about 3 dozen immovable properties, whose value could be more than ₹ 130 crore have also been detected. It includes properties acquired either in their name or their associates or benamidars. Evidences of their involvement in international hawala transaction and routing of the ill-gotten money to certain foreign jurisdictions have also been recovered. Loose sheets and excel files with details of unaccounted cash receipts and payments aggregating to several crores have also been found and seized, which have not been recorded in the regular books of account.  

In the case of contractors, the seized documents reveal the modus-operandi adopted by them for large-scale suppression of taxable income by inflating their expenses. For this purpose, the prominent recourse is over-invoicing of sub-contract expenses through a maze of entities and by claiming non-genuine expenses.  Certain instances show that cash has been taken out from these entities and the same has been utilized for obtaining undue favours for awarding of contracts and also for making unaccounted payments for investments in properties. The preliminary investigation indicates that these contractors have evaded income to the extent of ₹ 200 crore on account of the above malpractices.

During the search operation, undisclosed cash of ₹ 2 crore and jewellery of ₹ 1.5 crore have been seized so far.

Further investigations are in progress.

Tax evasion exposed via search operations uncovering inflated expenses, hawala links and undisclosed assets; investigations continue. Income-tax search and seizure operations in Mumbai uncovered incriminating documents and digital evidence indicating unaccounted cash receipts and payments, particulars of around three dozen immovable properties held through associates or benamidars, and evidence of international hawala routing. Records show a modus operandi of tax evasion through inflated expenses and over invoicing of sub contract payments, extraction of cash for undue favours and unaccounted property investments. Preliminary assessment notes substantial suppression of income; undisclosed cash and jewellery were seized and investigations are ongoing.