Amid elections, Income Tax Department exposes Rs 75 crore-fraud in Bihar; here’s how they operated

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October 31, 2020 1:05 PM

Amid a lot of buzz around Bihar elections, new fraud cases have surfaced in the state as the Income Tax Department carried out searches.

World Savings Day, investor behaviour, mutual funds, PPF, LIC, tax saving schemes, fixed income, recurring deposits,The proposal was part of the Atma Nirbhar Bharat 3.0 package announced on November 12.

Bihar elections 2020: Amid a lot of buzz around Bihar elections, new fraud cases have surfaced in the state as the Income Tax Department carried out searches. After many searches on October 29 among four prominent contractor groups, the tax department unearthed unaccounted income worth Rs 75 crore in Patna, Hilsa, Bhagalpur, and Katihar.

The search was also conducted on some traders who were a part of mined rocks in Gaya. “All the four groups have been found to have been evading taxes by inflating expenses for the supply of material and labour,” the Ministry of Finance said in a statement.

According to the ministry, in one of the cases, payments were made to various parties and there was no evidence of services/supplies being received. It is to note that in such cases, payments made to bogus parties are usually returned as an unsecured loan or maybe in cash. The income tax department found similar loans of about Rs 10 crore. Additionally, there were some substantial bogus purchases that are debited in the books.

“These parties do not exist, but are shown as ‘creditors’ in the books. Such creditors amount to about Rs. 20 crore,” the government said. Apart from this, bank documents, accounts along with other incriminating material (belonging to some bogus parties) were seized by the department from the premises of the assessee.

The government highlighted that the documents as well as field investigations pointed out ingenuity of political parties. Further it said that bank accounts that have been opened are operated by the assessee only. While acquiring properties, it was found that some cash was also generated.

It was also revealed that sundry creditors for Rs 15 crore unpaid labour turned out to be bogus. “There are documents showing inflation of expenses of about Rs 15 crore in another group. This group has made investments in properties in Bihar, Orissa, and Madhya Pradesh,” added the finance ministry.

Similarly, from other groups, unaccounted cash, sales and purchases of stone that was not recorded in account books, fixed deposits/ properties placed under prohibitory orders have all been unravelled by the department. Combined all of these, it was found that Rs 75 crore has been unaccounted so far. However, the income tax department is still looking for more such evidence.

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