Income Tax Department Finding Rs 75-Crore “Unrecognized Income” in Raids on Bihar Traders


The Income Tax Department had detected “undisclosed” income of Rs 75 crore.

New Delhi:

The income tax department had detected “undisclosed” income of Rs 75 crore after raiding some entrepreneurs and traders in several locations in Bihar, the CBDT said on Friday.

The searches were carried out Thursday against “four important groups” of entrepreneurs in Patna, Bhagalpur, Hilsa and Katihar.

In addition, investigations (where the tax authorities only search the business premises of the person assessed) have been carried out with some traders of quarried rocks in the Gaya district of the state.

“All four groups were found to have avoided taxes by inflating expenses for the provision of materials and labor. Research, so far, has led to the discovery of unrecorded income of about Rs 75 crore, ”the Central Board of Direct Taxes said in a statement.

The CBDT is the administrative authority of the income tax service.

As much as Rs 3.21 crore in cash was seized during the raids, while fixed deposits of Rs 30 crore were placed under prohibitive orders, he said.

In addition, properties worth Rs 16 crore are under banning orders, the statement said.

The polls for the assembly of 243 Bihar members are being conducted in three phases. The first phase took place on October 28, while the next two rounds will take place on November 3 and November 7. The counting of the votes will take place on November 10.

Just this month, the tax department raided two government contractors, a silk trader, a mining businessman, a cooperative bank chairman and their Bihar-related entities for tax evasion.

The CBDT said that in one case it found that payments were made to various parties without any evidence of receiving services or supplies.

“Payments made to bogus parties are clawed back in the form of an unsecured loan or sometimes withdrawn in cash. These loans are around 10 crore rupees,” he said.

The tax department also found that “substantial fake purchases were debited from the books.”

“These parties do not exist, but are listed as ‘creditors’ on the books. These creditors amount to around Rs 20 crore,” he said.

Bank documents, accounts and other “incriminating” items of certain fictitious parties were seized from the premises of the person assessed, he said.

“These documents and the resulting field investigations make it clear that the parties are not genuine and that bank accounts have been opened and are managed solely by the person assessed.”

“The money generated was used to acquire properties,” said the CBDT.

Documents show that in another case, overspending payments are made by bearer checks.

“These payments are withdrawn from the bank account by the person’s own people. These amounts are in the process of being quantified.”

“There are various bogus creditors for unpaid work of around Rs 15 crore,” he said.

Documents showing spending inflation of around Rs 15 crore in another group were found, he said.

This group has made investments in properties in Bihar, Odisha and Madhya Pradesh.

In another case, evidence of payments made for fake purchases by means of checks but received in cash was seized, he said.

“The money generated was invested in the purchase of properties and the construction of a commercial building. Evidence of such concealment of income of around Rs 10 crore, using this modus operandi, has been found,” did he declare.

In the investigation operation, evidence of unrecorded inflows, sales and unrecorded purchases was found totaling more than Rs 8 crore, the council said.

“In addition, sales and purchases of stone etc. turned out not to be recorded in the books of account,” said the CBDT.


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