The Income Tax Department on Thursday revealed that it conducted search and survey operations at 37 locations in Mumbai and Surat connected to civil contractors working with the Brihanmumbai Municipal Corporation on November 6, Hindustan Times reported. The department has found irregularities to the tune of Rs 735 crore.
Incriminating documents seized show that the contractors were involved in money laundering and tax evasion. “It has also led to the detection of the use of bogus companies [floated by entry providers] for giving entries to businesses in the form of loans or bills for expenses, etc,” the I-T department said in statement.
Entry providers or accommodation entry providers allow one to illegally route money through paper companies in exchange for commission.
Income Tax officials also found two of the contractors were blacklisted by the civic body in 2017 after an investigation into a Rs 350-crore road scam found them responsible for substandard work.
Ravi Raja, leader of the Opposition in the BMC, said they heard about the raids. “The I-T [department] should send the details to the BMC based on which the BMC should undertake an internal enquiry,” he told The Hindu. “Meanwhile, no action has been taken against contractors for shoddy roads found within the defect liability period. Also, in the latest contracts for road construction, all contractors have quoted above estimates. This is a racket.”
Yashwant Jadhav, standing committee chairperson said, “We had only heard of the raids but so far, we do not know if our engineers are involved.”