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Income Tax searches lead to detection of undisclosed foreign assets of more than Rs. 1000 crore

Taking forward the mission of the Government against black money, particularly undisclosed foreign assets, the Income Tax Department conducted searches on 19th January, 2020, on a group which has been on their radar for having substantial undisclosed foreign assets. The operation covered 13 premises in NCR.

The group is a leading member of the hospitality industry, running a hotel abroad and a chain of luxury hotels under a prominent brand name, situated at various locations in India.

The search operation has so far resulted in seizure of unaccounted assets valued at Rs. 24.93 crore(cash of Rs. 71.5 lakh, jewellery worth Rs.23 crore and expensive watches valued at Rs.1.2 crore).

Evidence seized during the search reveals that a large amount of black money was stashed abroad by the group, through the mechanism of Trusts, formed in early 1990s in tax havens.

Such foreign holdings of the main persons have remained hidden for decades beneath complex multi layered structures, located in different countries, ensuring secrecy. Search action further revealed that one of the close relatives of the promoter family was intentionally introduced as a front to ostensibly escape the provisions of domestic tax laws.

The investigation has successfully lifted the veil, leading to detection of  undisclosed foreign assets of more than Rs. 1000 crore, apart from domestic tax evasion of more than Rs. 35crore which may, inter alia, lead to consequences under the Black Money Act, 2015,as also, action under the Income-tax Act, 1961 respectively. Foreign assets include investment in a Hotel in UK, immovable properties in UK and UAE and deposits with foreign banks. Further investigations are in progress.

Search in group running renowned educational institutions in Tamil Nadu

The Income Tax Department mounted a search on a group operating leading educational institutions having a large number of schools and colleges in Chennai and Madurai region. The search was conducted at the office of the Trust, residences of the trustees and key employees of the group. The charitable trusts are running a medical college and hospital, Engineering colleges and schools across Tamil Nadu. Search and survey operations were carried out at 64 places across the State.

During the search, evidences were unearthed of fee collected under various nomenclatures from students of Engineering colleges; schools run by the group which were received in cash and not accounted for;and cash receipts not accounted for in the hospital account. Loans and interest were seen repaid in cash which were earlier taken in cash for the purpose of unaccounted investments. These receipts were utilised for the purchase of properties by paying on-money.

The search has resulted in the seizure of around Rs.2 crore of unaccounted cash. Out of the unaccounted income detected so far, the group has admitted an amount of Rs. 532 crore as their undisclosed income. The searches are temporarily concluded and further investigations are under progress. 

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