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Case 7: Bangalore Based Contractors

Author: ITD Date:12-06-2017 17:05 PM

Two major civil contractors of Bangalore who undertake state government civil contract works from irrigation and other departments, were alleged to have engaged in massive inflation of expenses and investment of unaccounted income in purchase of immovable properties. Discreet enquiries also revealed that they were helping in conversion of unaccounted cash in SBNs held by other persons post 8 November, 2016.

Search revealed that money was transferred to related entities through the banking system and subsequently received back in cash. In one premise, bank passbooks of 34 persons were found. The Managing Director of the group company accepted that these accounts were used to generate cash and the account holders were mere name-lenders. He also accepted that several bank accounts were opened in the names of subcontractors, many of whom were relatives or friends of the Directors. These bank accounts were used to withdraw cash for inadmissible and non-business expenses. A sum of Rs. 1.96 crore in SBNs, belonging to the Group, was also seized from the residential premise of a close friend of the MD of the Group.

The group also paid nearly Rs.1.3 crore in SBN to their labour on 8th November, 2016 and booked it as labour expenses. The search led to seizure of Rs. 4 crore in cash and valuables and admission of Rs. 167 crore as undisclosed income.
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