Conducting its biggest operation ever in Madhya Pradesh, the income tax department's investigation wing swooped on city's nine leading builders and searched their 45 premises including 19 residences on Friday.
All the searches were held in Indore except Pumarth Group whose one of the premises was searched in Mumbai. Department's 300 officials from MP and Chhattisgarh, along with 200 policemen, began search operation at 8am, which continued till late night. The search will continue for next couple of days. A large number of incriminating documents and jewellery were seized during the course of search.
The real estate groups searched included Apollo Group, Garha Group, NRK Group, Pumarth Group, Sakar Group, Mohan Chug Group, Jhaveri Group, Mansukhani Group and Royal Builders Group.
Most of the real estate groups searched on Friday have generated wealth somewhere between Rs. 500 crore to Rs. 1,000 crore each, department sources said. The search holds significance given the fact that Indore builders' lobby is the wealthiest and most politically influential group in MP that has been bankrolling elections and playing a key role in government policy making.
With real estate emerging as a major black money and money-laundering source, different government agencies including income tax department have quantified the unaccounted wealth or income, which is in circulation or being invested in real estate. “They have put the figure varying from 1/3rd of GDP to equivalent of country's GDP,” a senior income tax department official said wishing anonymity.
Responding to a petition related to real estate crime, the Lucknow bench of Allahabad High Court in December 2010 had ordered Central Board of Direct Taxes, I-T department's apex body, to form a National Property Exchange and National Land Stock Exchange to curb land-related crimes and generate more white money in real estate sector. With Friday's search, the department expects to trace large network of bogus companies through which the money could have been layered. There is prima facie evidence that some of the companies searched on Friday expanded capital base without paying taxes.
Of the nine real estate groups that were searched, income tax department had surveyed Jhaveri group in 2011 in which an unaccounted income of Rs. 50 crore was unearthed. It is the second I-T search conducted in three months. On June 20, the department's investigation wing had searched premises of mining baron Sudhir Sharma and infrastructure developer Dilip Suryavanshi, who is allegedly close to chief minister Shivraj Singh Chouhan.