Income Tax Department conducts searches on two major real estate developers of Ludhiana

Income Tax Department conducts searches on two major real estate developers of Ludhiana

On 16.11.2021, the Income Tax Department launched a search and seizure operation against two big Ludhiana real estate companies. Around 40 locations in Ludhiana were searched as part of the operation.

The main finding of both organisations’ search and seizure activities is that they received unaccounted cash through on-money on property purchases. Documentary proof in the nature of ‘agreement to sell’ (popularly known as ‘Biyana’ in local lingo) for some properties was discovered and seized during the search process. These documents show that the ‘agreement to sell’ for plots was executed for a substantially higher amount/rate than the consideration mentioned in the plot’s registered sale deed. In addition, incriminating documents such as loose sheets, excel sheets demonstrating the calculation of receipt of on-money in particular property deals, soft data, chats from the parties concerned’s mobile phones, and so on have been recovered. A preliminary examination of these documents reveals that unexplained cash was received in the form of on-money on real estate deals. In addition, a number of other corroborating evidences supporting the receipt of on-money have been acquired.

Investigations have also shown that unaccounted cash expenditures were made on the construction of one of the key persons’ residential house.

Defaults on compliance with provisions of tax deduction at source have been found in one of the groups with reference to payments made to land sellers, etc.

Unaccounted cash worth roughly Rs. 2.00 crore, as well as foreign exchange, and unexplained jewellery worth about Rs. 2.30 crore, were seized as a result of the search.

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