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I-T dept unearths BMC's contract scam

KT NEWS SERVICE. Dated: 3/4/2022 4:16:01 PM

3 dozen properties worth over Rs 130-Cr found

NEW DELHI, Mar 03: The Income Tax Department has unearthed a major contract scam of the Brihanmumbai Municipal Corporation (BMC) involving a prominent person in the search and seizures carried out on February 25 at more than 35 Mumbai premises.
It, however, did not disclose the name of the prominent person, but claimed the evidences so seized strongly indicate a close nexus between him and the contractors. It said particulars of three dozen properties worth over Rs 130 crore were detected.
According to an IT Department press release, It includes properties acquired either in their name or their associates or benamidars. Evidences of their involvement in international hawala transaction and routing of the ill-gotten money to certain foreign jurisdictions have also been recovered. Loose sheets and excel files with details of unaccounted cash receipts and payments aggregating to several crores have also been found and seized, which have not been recorded in the regular books of account.
In the case of contractors, the seized documents reveal the modus-operandi adopted by them for large-scale suppression of taxable income by inflating their expenses. For this purpose, the prominent recourse is over-invoicing of sub-contract expenses through a maze of entities and by claiming non-genuine expenses. Certain instances show that cash has been taken out from these entities and the same has been utilized for obtaining undue favours for awarding of contracts and also for making unaccounted payments for investments in properties. The preliminary investigation indicates that these contractors have evaded income to the extent of Rs. 200 crore on account of the above malpractices.
During the search operation, undisclosed cash of Rs. 2 crore and jewellery of Rs. 1.5 crore have been seized so far.