Operation Mahakal: 6 Day Search by Income Tax Dept at Noida uncovers Rs. 1500 Cr Unaccounted Cash

Income Tax Dept Search and Seizure at Noida revealed Rs. 1500 Cr unaccounted cash with Builders and related entities
Operation Mahakal - 6 Day Search - Income Tax Dept Noida - Unaccounted Cash - 6 Day Search by Income Tax Dept - taxscan

Income Tax Department Launches Operation ‘Mahakal’ Against Noida-Based Construction Groups

The Income Tax (I-T) department has mobilized 40 teams, comprising a total of 250 officials, to execute searches at various locations associated with four prominent Noida-based construction groups, namely Bhutani Infra, Group 108, Advent, and Logix. The operation is in response to allegations of tax evasion against these entities.

Following an extensive 6-day search across the premises linked to these companies, I-T officials successfully uncovered unaccounted cash exceeding Rs 1,500 crore.

Dubbed ‘Mahakal,’ the operation specifically targets the four companies involved in tax evasion related to the sale of commercial spaces. Additionally, I-T officials conducted raids on two brokerage firms.

During the investigation, officers stumbled upon two concealed pen drives belonging to Bhutani Group employees, containing crucial information about the company’s substantial cash transactions.

For the financial years 2019-20, 2020-21, and 2021-22, the Bhutani Group received cash totaling Rs 429 crore. Further analysis of the pen drive data disclosed that the group had acknowledged an unreported cash inflow of Rs 595 crore from the fiscal year 2019-20 onwards.

In addition, officials obtained statements from Bhutani Group employees, wherein key individuals confessed to participating in cash transactions within the group. The group allegedly offered ‘Assured Cash Return’ and ‘Brokerage in Cash’ to both investors and brokers.

The entire tax evasion scheme appears to revolve around the Assured Cash Return program, as highlighted in the agreements. While this scheme complies with Securities and Exchange Board of India (SEBI) guidelines, it was exploited for tax evasion purposes. Investors are cautioned to avoid involvement in such schemes to prevent potential legal repercussions.

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