I-T detects tax evasion after raids on group running largest Srinagar hospital

The Income Tax Department has detected multiple instances of alleged tax evasion after it raided a business group that runs the "biggest private" multi-speciality hospital in Srinagar, the CBDT said on Sunday.

The searches were launched on Friday, and seven premises including four residential were covered.

While an official statement issued by the Central Board of Direct Taxes (CBDT) did not name the entity raided, official sources in the department identified it as the group that runs the Noora hospital located in Zainakote, Srinagar.

The statement said Rs 82.75 lakh cash and jewellery and bullion worth Rs 35.7 lakh were seized "as the concerned persons from whose custody these were found were not able to explain the same".

The department has also "sealed" a bank locker found during the raids.

The core business of the group includes running of the over 100-bed multi-speciality hospital, real estate and trading of household consumables, it said.

"The group is in the practice of buying large chunks of lands in piecemeal and aggregating them. Thereafter, it develops the land and carves out plots and sells them.

"Evidence showing more than 50 per cent of consideration (over and above the registered value of the property) received in cash from buyers, has been seized during the search operation," the CBDT said.

Such sale consideration received in cash, it alleged, has "never" been offered to tax.

"The group has made unaccounted property transactions of more than Rs 100 crore in cash since finanical year 2013-14."

"The payments/investments made through banking channels by the buyers of plots are also under investigation as prima-facie verification has shown that the investments have not been made using tax-paid income," it alleged.

Thus, taxes will be leviable not only on the seller group but the buyers also, depending on the facts of the cases, it added.

"There is substantial default of TDS on almost all purchases and sales of land and plots," the Board, that frames policy for the tax department, said.

The action also "revealed substantial evasion of stamp duty due to the government on cash paid as sale consideration over and above the registered value of the property".

"The information in this regard will be shared with the J-K UT authority for levy of stamp duty on the entire sale consideration, as evident from the seized documents and notification of circle rates as per the prevailing market rates," it said.

The CBDT claimed that individuals linked to the group "have taken a number of plots/land as gifts from various unrelated individuals and they have not shown any income on this score...even though the same is chargeable to tax in the hands of the donee as income from other sources."

"The cases of the donors are also under investigation from the perspective of evasion of income tax," the statement said.

Describing another instance of alleged tax evasion, the CBDT said that "one of the taxpayers of this group engaged in trading of household consumables has made cash purchases of these items worth Rs 2 crore in 6 months (FY 2019-20) in violation of tax provisions which mandate payment of more than Rs 10,000 at a time through banking channels only."

"Evidence of various benami properties has also been unearthed and seized during the search. The same is under investigation," it said.

"Suppression of receipts from the running of the hospital is under investigation. The average turnover shown by the hospital is around Rs 10-12 crore since FY 2015-16, however, seized evidence shows actual receipts to be at least four times more," the CBDT claimed.

Evidence showing cash payments of Rs 3 crore, made to various doctors in the current year, has been seized during the search, it claimed.