I-T dept detects benami assets, hawala transactions after raids on Sena Corporator, BMC contractors

The Income Tax Department has found about three dozen properties, including some alleged benami ones, worth Rs 130 crore after it recently raided premises of a Shiv Sena Corporator and some BMC contractors in Mumbai, sources said on Thursday. The department raided more than 35 premises in Maharashtra's capital city on February 25, and the CBDT said in a statement on Thursday that "preliminary investigation indicates that these contractors have evaded income to the extent of Rs 200 crore on account of...malpractices."

The Central Board of Direct Taxes (CBDT) frames policy for the tax department.

The statement said the raids were carried out against certain contractors executing contracts of the Brihanmumbai Municipal Corporation (BMC), a "prominent" person and their close associates.


Sources said the "prominent person" was Shiv Sena corporator Yashwant Jadhav, who is also the chairman of the BMC standing committee.

"Numerous incriminating documents, loose sheets and digital evidences have been found and seized. The evidences so seized strongly indicate a close nexus between these contractors and the said (prominent) person," the statement alleged.

It said "particulars of about 3 dozen immovable properties, whose value could be more than Rs 130 crore have also been detected".

The assets, the CBDT claimed, include properties acquired either in their (prominent person) name or their associates or benamidars (in whose name the benami asset is standing).

"Evidences of their (prominent person) involvement in international hawala transaction and routing of the ill-gotten money to certain foreign jurisdictions have also been recovered," according to the statement.

"Loose sheets and excel files with details of unaccounted cash receipts and payments aggregating to several crores have also been seized, which have not been recorded in the regular books of account," the CBDT alleged.

Shiv Sena spokesperson and Rajya Sabha MP Sanjay Raut had told reporters on the day of the raids that the I-T department action was conducted with an ulterior motive to malign the party and with an eye on the upcoming Mumbai civic body elections.

The Shiv Sena, which is in power in Maharashtra along with the NCP and Congress, rules the BMC at present.

In the case of contractors, the CBDT said, the seized documents show the modus-operandi adopted by them for "large-scale suppression" of taxable income by inflating their expenses.

"For this purpose, the prominent recourse is over-invoicing of sub-contract expenses through a maze of entities and by claiming non-genuine expenses," the statement alleged.

Certain instances show that cash has been taken out from these entities and utilised for obtaining "undue" favours for awarding of contracts and also for making "unaccounted" payments for investments in properties, it said.

The CBDT said the probe in the case is continuing and Rs 2 crore cash and jewellery worth Rs 1.5 crore have been seized so far.