₹263 crore TDS refund fraud: ED to refer dubious documents to Maharashtra police

The properties in question included purported spacious flats in Mumbai and Thane, as well as a plot of land in Panvel, Raigad, belonging to others

MUMBAI — A money laundering investigation by the Enforcement Directorate (ED) into a ₹263-crore tax refund fraud has uncovered that several property and transferrable development rights (TDR) documents, seized from Purshottam Chavan, the husband of a Maharashtra-cadre IPS officer, were fake. Agency sources said they would refer the counterfeit documents to the Maharashtra police for further investigation and legal action.

ED discovered that all the recovered documents, except for two pertaining to Chavan's flats in Malabar Hill and Dadar, were dubious.

Chavan was arrested on May 20 by the ED in connection with the tax fraud case, facing accusations related to possession, concealment, and diversion of the proceeds of crime.

During the probe, the agency recovered documents related to over a dozen properties in the names of several individuals, estimated to be worth around ₹100 crore. Additionally, alleged TDR documents, valued at approximately ₹50 crore, were found during a search at Chavan's south Mumbai residence.

The properties in question included purported spacious flats in Mumbai and Thane, as well as a plot of land in Panvel, Raigad, belonging to others, according to agency sources.

After thorough scrutiny, which included verifications with state government authorities and banks, the ED discovered that all the recovered documents, except for two pertaining to Chavan's flats in Malabar Hill and Dadar, were dubious. The agency plans to hand over the allegedly fake documents to the state police for further action once it files its supplementary chargesheet, as they fall outside the scope of the money-laundering investigation.

The agency's probe revealed that the alleged property documents, which appear to be registration papers, seemed almost genuine at first glance. However, further verification established their dubious nature. In one instance, the ED found that the name of a "deputy secretary" was wrongly used, along with the photograph of another person.

The fake registration papers allegedly pertained to housing units typically accessed from discretionary quotas of government entities, including those related to economically weaker sections and minorities. The agency has recorded the statements of a few individuals whose names appeared on the property papers and suspects that the accused may have obtained funds from them under the pretence of allocating non-existent housing units from the quotas.

The ED is also investigating allegations that Chavan received around ₹8-10 crore in exchange for claims that he could influence the probe in favour of an accused. The agency is verifying if up to ₹2 crore could have been allegedly paid in cash. As part of the investigation, the ED has recorded witness statements from two police constables who alleged collecting cash bags from an accused on Chavan's instructions.

Chavan's arrest followed that of Rajesh Batreja, a Navi Mumbai businessman, who was nabbed last month. The investigation revealed that Batreja and Chavan were allegedly in regular contact and shared messages related to the diversion of the proceeds of crime and related hawala transactions. The agency also alleged that Chavan had attempted to hamper the probe by destroying evidence that could have led to the tracing of the crime proceeds.

Apart from Batreja and Chavan, the agency previously arrested three other individuals in the case: former I-T official Tanaji Adhikari and businessmen Bhushan Patil and Rajesh Shetty. Batreja is accused of helping divert a portion of the crime proceeds, amounting to ₹55.4 crore, abroad.

The ED initiated its investigation based on a case registered by the Central Bureau of Investigation (CBI) against Adhikari and others for fraudulently generating and issuing 12 TDS refunds from the I-T department between November 15, 2019 and November 4, 2020, withdrawing a total of ₹263.95 crore. To date, the ED has seized/attached immovable/movable properties worth ₹168 crore and has submitted its chargesheet against Adhikari and 10 others in a Mumbai special court, which has taken cognizance of it.