I-T raids on civil contractor reveal Rs 70 crore in unaccounted income

The income tax department on Wednesday said it has detected over Rs 70 crore in undisclosed income from last week’s raids on a construction firm in Dharwad district. The company, engaged in executing civil contracts in the roads and water resources sector, is owned by a close aide of a senior Congress leader, and the search and seizure operations two days before the by-polls had sparked angry reactions from Congress leaders.

The I-T department, in a press release, said the search operation revealed that this group has been suppressing profits by booking bogus expenses in the name of purchase of materials, labour expenses and payment to subcontractors.

The officials have seized documents including digital evidence showing claims of some expenses that had not been genuine, the department said.


The group has received unaccounted cash from some vendors and suppliers of materials, and it also used promoter’s relatives, friends and employees as subcontractors who neither executive any work nor did they have the competence to executive civil work. The assessee group has been generating unaccounted cash from these transactions, the press release said.

The department said the business group has admitted to an undisclosed income of over Rs 70 crore, and added its investigations were under progress.