ED arrests fifth accused in ₹263 crore TDS refund fraud case

ED's Mumbai unit arrested Purshottam Chavan for his role in a money laundering probe involving fraudulent TDS refunds worth ₹263.95 crore.

MUMBAI: The Enforcement Directorate (ED)’s Mumbai Zonal Unit on Monday made its fifth arrest in the money laundering probe related to alleged fraudulent withdrawal of TDS (Tax Deducted at Source) refunds worth ₹263.95 crore from the Income Tax (I-T) department.

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The arrested person, Purshottam Chavan, is accused of possession, concealment, and diversion of the proceeds of crime. He was arrested by the agency after his name came up following the arrest of Rajesh Batreja, who was nabbed by the ED last week.

The investigation revealed that Batreja and Chavan were in regular contact and shared messages related to the diversion of the proceeds of crime and related hawala transactions, ED sources said.

On Sunday, the ED searched Chavan’s premises and seized several property-related documents, foreign currency and mobile phones. The agency also alleged that Chavan had attempted to obstruct the probe by destroying some evidence, which could have led to tracing the crime proceeds.

“Consequently, Purshottam Chavan was arrested for his involvement in dealing with the proceeds of crime and produced before a Mumbai court that remanded him to ED’s custody till May 27,” an agency source said.

Apart from Batreja and Chavan, the agency previously arrested three persons in the case — former I-T official Tanaji Adhikari and businessmen Bhushan Patil and Rajesh Shetty.

Batreja, who is in ED’s custody remand, allegedly helped divert a part of the crime proceeds amounting to ₹55.4 crore abroad. Subsequently, Batreja had allegedly brought back and concealed the proceeds in two entities located in Mumbai and Gurugram in Haryana by presenting them as investments from Dubai, United Arab Emirates. After the diversion, Batreja allegedly aided Adhikari in concealing the proceeds of the crime by placing them in firms and incorporating them with the assistance of a local individual in Dubai, presenting them as untainted funds.

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 to November 4, 2020, and thus withdrew a total amount of ₹263.95 crore.

So far, the ED has seized/attached immovable/movable properties worth ₹168 crore. The agency had previously submitted its chargesheet against Adhikari and 10 others in a Mumbai special court, which took cognizance of it.