₹100-cr undisclosed funding by Srinagar group detected

SRINAGAR: The income tax department conducted a series of raids in Srinagar and Delhi on Thursday evening and unearthed undisclosed investments worth around ₹100 crore.

Searches and seizures were carried out on entities belonging to a group of three assessees based in Srinagar, officials of the I-T department said on Friday. “Searches were conducted at 15 residential and business premises, of which 14 were in Srinagar and one was in Delhi,” a spokesperson for the Central Board of Direct Taxes ( CBDT) said in a statement.

The group, which has not been named by the department, is engaged in multiple businesses including real estate, constructing and renting commercial and residential complexes, hotels, handicrafts, and trading, the spokesperson said.

“The searches have led to the seizure of unaccounted cash amounting to ₹1.82 crore and, jewellery and bullion worth ₹74 lakh. Undisclosed investment and cash transactions amounting to ₹ 105 crore have been unearthed during the searches,” he said.the spokesperson said the group owns a 75,000-sq ft mall in Srinagar, for which no income tax returns had been filed. The land was acquired under the J& K State Lands ( vesting of ownership to the occupants) Act 2001, popularly known as the Roshni Act, from the state government at a throwaway price, he said. “The search has uncovered evidences of an unexplained investment of around ₹ 25 crore in the mall,” he said.the group was also constructing six residential towers in Srinagar, of which two towers of around 50 flats each have already been completed and the remaining are under construction, but no I- T returns have been filed. “There appears to be an unexplained investment of ₹ 20 crore in the project,” he said.

The group was also found to be running a school under a trust that is not registered under the Income Tax Act, 1961.

“One of the trustees has admitted to have withdrawn substantial cash from the said trust and diverted it towards other businesses and personal expenses of the group. There is also an unexplained investment of ₹10 crore on the school building.”

The statement said the searches had led to recovery of incriminating evidence of receipt and payment of cash amounting to over ₹ 50 crore. The premises of an engineering consulting firm that had valued almost all properties of the group was also searched.

It was found that the firm had not filed income tax returns although it had earned over ₹4 crore from valuations in the last six financial years.“The engineering consulting firm had valued properties of different assessees in the Valley in such a way that they could mortgage those properties to avail maximum loans,” the spokesperson said.