I-T sleuths blow lid off Rs 2K-crore scam in TS, AP

Hyderabad: The Central Board of Direct Taxes (CBDT) on Thursday said that it has unearthed a whopping Rs 2,000-crore bogus transactions during its search operations of infrastructure companies in Telangana and Andhra Pradesh.

The CBDT's official spokesperson and Commissioner of Income Tax, Surabhi Ahluwalia, said that the Income Tax department carried out search and seizure actions on February 6 at Hyderabad, Vijayawada, Kadapa, Visakhapatnam, Delhi and Pune.

She said that more than 40 premises were covered during the search operations. The search operations included three prominent infrastructure groups based in Andhra Pradesh and Telangana, she added.

The investigations led to busting of a major racket of cash generation though bogus sub-contracts, over-invoicing and bogus billing. Besides, several incriminating documents and loose papers were also found and seized during the search.

Apart from emails, WhatsApp messages and unexplained foreign transactions were unearthed during the search, Surabhi said.

Further, the search operation was also carried out on close associates including ex-personal secretary of a prominent person and incriminating evidence seized.

The modus operandi revealed that the infrastructure companies had sub-contracted work to several non-existent or bogus entities.

Preliminary estimates suggest siphoning of more than Rs 2,000 crore through a transaction that was layered through multiple entities with the last in the chain being small entities with turnover less than Rs 2 crore.

This is to avoid maintenance of books of account and tax audits etc. She said that such entities were either not found at their registered address or were found to be shell entities.

Several such sub-contractors were controlled by the principal contractors with all their ITR filings and other compliances being done from the IP addresses of the main corporate office.

Also, FDI receipts of several crores in the group companies of one of the infrastructure companies are suspected to be round-tripping of its unaccounted funds.

During the operations, unexplained cash of Rs 85 lakh and jewellery worth Rs 71 lakh were seized and more than 25 bank lockers were retained, she said.