The Income Tax department carried out a search and seizure operation on three real estate developers, engaged in the business of land development as well as construction activities in the town of Kurnool and other mofussil areas of Andhra Pradesh, Telangana, and Kerala.
More than two dozen premises have been covered in the search operation spread over Kurnool, Ananthapur, Kadapa, Nandyal, Bellary Kottayam, Eranakulam, Thrissur, Palakkad and Kannur.
During the course of the search operations, several incriminating documents, such as handwritten books, agreements, etc. have been found and seized. Digital data has also been seized from a specialized software application as well as from other electronic gadgets.
It has been found in the case of one of the assessee groups that it has been using software that has been systematically modified to eliminate the unaccounted cash element of the consideration received and to record in the regular books of account the sale consideration that matches with registered sale price.
These groups have been found to be accepting cash over and above the registered value of the properties. Such unaccounted cash is used for payments of on-money towards the purchase of lands and incurring other expenditure.
So far, the search action has led to the seizure of unaccounted cash of Rs.1.64 crore. The search has resulted in the detection of unaccounted cash transactions to the tune of Rs. 800 crore.
In Kerala, during the course of the search operation, various incriminating documents and digital evidence have been found and seized, including a parallel set of books of account recording the entries of actual sales and receipt of cash.
These evidence have clearly revealed the modus operandi being followed by the quarry operators as they are indulging in large scale suppression of sales made in cash including the fact that these transactions are not recorded in the regular books of account of the group.
The correlation of this evidence also indicates that unaccounted cash so generated is systematically invested in acquisition of immovable properties, used for the business of cash loans, and unrecorded capital investments in other businesses.
The search team has also gathered evidence of on-money payment for purchase of properties and substantial cash deposits in undisclosed bank accounts.
The assessees of the group have been found to have sold immovable properties without duly accounting for the capital gains arising from such transactions.
The search action has resulted in seizure of unaccounted cash of more than Rs 2.30 crore.
So far, the search has led to the detection of estimated unaccounted income to the tune of Rs 200 crore. Further investigations are in progress.