IT department detects undisclosed foreign assets and funds after raids on Delhi-Mumbai-based group

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Press Trust of India

New Delhi: The Income Tax Department found that a Delhi and Mumbai-based business group – engaged in hospitality, marble sales and real estate – and its promoters allegedly ‘parked’ black money overseas and created undisclosed offshore assets.

The CBDT, the department’s administrative body, issued a statement on Friday saying it had seized Rs 2.5 crore of “undeclared” jewelry from the group, which has not been identified.

The raids on the group, which also deals in the lighting trade, were launched on July 7 and a total of 17 premises in Delhi, Mumbai and Daman were covered, it said in a statement.

The documents seized “indicate that the group placed its undisclosed money overseas in certain low-tax jurisdictions.”

“The group, through a network of companies based in Malaysia, eventually invested the funds in its hotel business in India and the amount of these funds is estimated to exceed Rs 40 crore,” the CBDT said.

The group has invested in a few companies overseas, which were set up specifically for commodity trading, he said.

The net worth of one such company, including its realized profits, was not disclosed by the group in its ITRs (income tax returns) for the relevant period, according to the statement.

“Additionally, it has been detected that the group promoter has invested in real estate in a foreign jurisdiction which was also not disclosed in its ITR,” the CBDT said.

Some offshore entities, he said, set up for commodity trading, have been identified which have also been “not reported”.

The CBDT alleged that the group was involved in “off-the-book cash sales” in its domestic operations.

“In his marble and lighting business, evidence seized indicates unrecorded cash sales of 50-70% of total sales.

“An undisclosed excess stock of Rs 30 crore was also found,” the statement said.

The Council said that in the hospitality sector, unrecorded sales were detected, specifically in the banqueting division.


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