The Income Tax department has seized unaccounted cash of Rs 32 crore and gold bullion worth Rs 28 crore after its recent searches against two business groups, including one linked to DMK MP S Jagathrakshakan, in Tamil Nadu and Puducherry.
The CBDT said in a statement on Wednesday that the raids were initiated on October 5 at about 100 premises of the two groups — one of them running educational institutions that offer professional courses and the other is involved in distillery, pharmaceuticals, hospitals and hotels, etc.
The same day the tax sleuths had raided the house of DMK MP S Jagathrakshakan and some of those linked to him. The MP from Arakkonam has interests in a variety of business sectors. Tamil Nadu Chief Minister and DMK President M K Stalin had reacted that day and said on X: “The Union BJP Government’s vindictive politics knows no bounds! Arresting AAP MP Sanjay Singh and raiding DMK MP Jagathrakshakan’s home are clear examples of their misuse of independent investigating agencies for political ends against INDIA bloc leaders….” In its statement, the CBDT said that so far the searches against the two groups “have resulted in seizure of unaccounted cash amounting to Rs 32 crore and gold bullion of Rs 28 crore, thereby aggregating to Rs 60 crore.” The statement did not identify the accused groups or their promoters.
Sources said one of the groups involved was linked to Jagathrakshakan. There was, however, no breakup of what amount of unaccounted cash and bullion was seized from either group. The Central Board of Direct Taxes (CBDT) frames policy for the tax department.
Talking about the group that runs educational institutions, the statement said a large number of “incriminating” evidences in the form of loose sheets, hard copy of documents, and digital data was seized. The modus-operandi of tax evasion detected in running such educational institutions includes concealment of fee receipts, bogus claim of disbursement of scholarships, etc, it claimed. “Large scale evidences about receipt of fee which are unrecorded in the books of account and claim of non-genuine disbursement of scholarships have been seized. The preliminary analysis, so far, has resulted in collecting evidences for such unaccounted fee receipts of more than Rs 400 crore and incorrect claim of disbursement of scholarship to the tune of Rs 25 crore,” the statement said.
In one of the groups, it added, evidence indicates that the trust was utilising the services of agents for garnering students, for which unaccounted commission payment of about Rs 25 crore has been made. In the distillery business run by one of the groups, the statement said, it was found that “bogus” expenditure has been claimed for about Rs 500 crore towards purchase of inputs such as, bottles, flavours, extra neutral alcohol and freight charges, etc.
“Such purchases are not corroborated with purchase invoices or entries in stock registers. Several evidences have been recovered showing that cheques have been issued to various non-existent entities and the same have been received back in the form of cash for making unaccounted investments and for other expenditure which are not allowable as business expenses,” the CBDT alleged.
The seized documents suggest that amount exceeding Rs 300 crore has been “diverted” from trusts either for personal expenses of the trustees or for deployment in diverse businesses. This also includes payments made by one of the groups for acquiring an industrial entity in Andhra Pradesh, the Board said.
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