Income tax department conducted search operation in Jammu and Kashmir

New Delhi: The Income Tax Department on 19.02.2021 searched and seized action on a group operating the largest private multi-specialty hospital with more than 100 beds in Srinagar.

All seven campuses, including four residential complexes located in Srinagar, were searched. The group’s core businesses include hospital operations, real estate and household consumer goods business.

The group is involved in the task of buying and collecting large pieces of land in small pieces separately. He then develops the land, makes their plots and sells them. More than 50 percent of the evidence received in cash from buyers (exceeding the registered value of the property) has been seized during the search operation. No tax has ever been paid on such sales consideration received in cash.

The group has transacted unaccounted assets of more than Rs 100 crore in cash since FY 2013-14. Payments / investments made by the buyers of the plot through banking channels are also under scrutiny, as prima facie verification shows that the investment has not been made by using tax paid income. Thus, not only the seller group but also the buyers will be taxed based on the facts of the cases. There is a notable omission in TDS on almost all purchases and sales of land / plots.

In addition, significant evasion of stamp duty received by the State Government / Union Territory due to cash payment in the form of sale consideration in excess of the registered value of the property has also been detected. In this regard, information will be shared with the Jammu and Kashmir Union Territory Authority for imposition of stamp duty on all sales considerations, as is evident from the notification of the circle rates as per the seized documents and prevailing market rates.

During the search, it is also seen that people have taken large number of plots / land as gifts from various unrelated persons and they have not shown any income for this under Section 56 of Income Tax Act 1961, whereas it is other Donation in the form of income from sources is liable to tax in the hands of the recipients. The cases of donors are also under scrutiny from the perspective of income tax evasion.

Additionally, a taxpayer of this group associated with the trade of household consumables has made cash purchases of domestic consumables equivalent to Rs 2 crore in six months in FY 2019-20, which is a violation of those tax provisions. In which payment of more than 10 thousand rupees at a time is only mandated through banking channels.

During the search, various benami properties have also been detected and seized, they are also being investigated. The concealment of receipts from the operation of the hospital is also being investigated. From FY 2015-16, the average turnover by the hospital is about Rs 10-12 crore, while the actual receipts from the seized evidence are showing more than four times that. Evidence showing cash payments of Rs 3 crore made to various doctors in the current year has also been seized during searches.

Cash worth Rs 82.75 lakh and jewelery and gold and silver worth Rs 35.7 lakh have also been seized, as the persons concerned under whose protection they were found were not able to disclose the same. A bank locker is also sealed.

Further investigation is in progress.

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