I-T sleuths unearth undisclosed income of over Rs 70 crore from top Karnataka civil contractor

BENGALURU: Some big-ticket contractors engaged in civil construction and irrigation projects in Karnataka are under the scanner of the Income Tax Department for alleged tax violations.

In October alone, I-T sleuths have reportedly unearthed huge tax violations running into crores of rupees by these entities.

Last week, the tax authorities detected unaccounted income of more than Rs 70 crore from a leading group in the state engaged in the civil construction of roads and irrigation projects following search and seizure operations on October 28 at various premises in North Karnataka.

According to an official release from the Ministry of Finance on Wednesday, the search operation has revealed that “this group has been suppressing its profits by registering bogus expenses in purchase of materials, labour and payment to subcontractors. Various incriminating documents including digital evidence indicating non-genuine claim of such expenses have been found and seized,” the ministry stated.

“The analysis of the seized documents shows that unaccounted cash has been received by the key group person from such vendors/ suppliers of materials. It was also found that their own relatives/friends/employees were used as conduits in the name of subcontractors who neither executed any work nor did they have the capability/capacity to execute the work. The assessee group has been generating unaccounted cash from these transactions,” said the ministry.

"The search action has led to detection of unaccounted income of more than Rs 70 crore which has been admitted as undisclosed income by the assessee group," it added.

The latest seizure comes close on the heels of the detection of undisclosed income of about Rs 750 crore from three major Bengaluru-based contractors engaged in the execution of irrigation and highway projects during the I-T search and seizure operations at 47 premises across four states in the first week of October. “Out of this, Rs 487 crore was admitted by the group entities as undisclosed income,” the ministry had stated.