The Income Tax Department conducted a search-and-seizure operation on February 19, on a group running the biggest private Multi-specialty Hospital in Srinagar. Seven premises including four residential premises, all in Srinagar, were raided.

The core business of the group includes running of the hospital, real estate & trade in household consumables.

Cash of ₹82.75 lakh and jewellery and bullion worth ₹35.7 lakh have been seized. A bank locker connected with the group has been sealed as well.

Suppression of receipts from the running of the hospital is under investigation. The average turnover shown by the Hospital is around ₹10-12 crore since FY 2015-16. However, evidence seized in the raid shows actual receipts to be at least four times more the value. Evidence showing cash payments of ₹3 crore, made to various doctors in the current year, has been seized during the search.

Evidence of various benami properties has also been unearthed and seized during the search.

The group has so far made unaccounted property transactions worth more than ₹100 crore in cash since FY 2013-14.

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% of consideration (over & above the registered value of the property) received in cash from buyers, has been seized during the search operation. Taxes were not paid in such sale considerations received in cash. The payments and investments made through banking channels by the buyers of the plots are also under investigation as prima-facie verification shows that the investments have not been made using tax-paid income. Thus, taxes will be leviable not only on the sellers but the buyers as well, depending on what the investigations reveal.

Furthermore, the search has revealed substantial evasion of stamp duty due to the State Government/Union Territory on the cash that paid as sale consideration over & above the registered value of the property.

The search also disclosed that the individuals have received plots of land as gifts from various unrelated individuals, and no income has been shown on this score under section 56 of the I. T. Act, 1961. The cases of the donors are also under investigation from the perspective of potential evasion of income tax.

One individual involved in the group running the multi-specialty hospital, who is engaged in a trade of household consumables, has made cash purchases of household consumables worth ₹2 crore in six months of FY 2019-20, in violation of the mandate that payment of more than ₹10,000 at a time in such purchases has to be done through banking channels only.

Further investigations are ongoing.

(Published from PIB)