IT swoops down on contractors; BMC in a tizzy

The change in political equations has come as bad news for contractors of Shiv Senadominated BMC.

Many of them are feeling the heat with the investigative wing of the income tax (I-T) department searching a total of 37 premises and surveying another seven.

Sources said, the I-T department had detected alleged irregularities of nearly Rs 735 crore in these searches at over 44 locations; at the receiving end were mostly civil contractors and their beneficiaries.

The raids have come at a time the relations between the saffron allies are extremely strained; their government formation efforts in the state have floundered and the Sena has pulled out of the BJP-led NDA government at the Centre.But despite the political divorce and much name calling, both parties are the controlling deity of the BMC.

The action had most political observers wondering why the I-T department had become proactive just when the

Sena-led government formation efforts were in full swing.

It is understood from CBDT sources that I-T department has detected the use of bogus companies (floated by entry providers) for giving entries to businesses in the form of loans or bills for expenses, etc.

In the case of the entry providers, a systematic modus operandi of bank fraud and forgery has been detected, whereby the promoters have made investments in immovable properties and shares of group companies by siphoning off the bank loans.

‘‘In the case of the contractor groups, several instances about inflation of expenses by bogus purchases/sub-contracts and taking of loans from entry providers have been identified," as per the CBDT release.

The raids, which began in the morning, were conducted in the offices and residences of several big BMC contractors.

Authorities said the investigations are still on and the remaining beneficiaries of the fraudulent operations will also be identified soon.