Fraudulent TDS withdrawal case: ₹55.5 crore diverted to Dubai firm as investments

The Enforcement Directorate's money-laundering probe reveals that ₹55.50 crore of a tax refund fraud was diverted to Dubai-based firms via hawala channels. Assets worth ₹166 crore have been seized in connection with the case.

Mumbai: The Enforcement Directorate (ED)’s money-laundering probe of a tax refund fraud of ₹263 crore revealed that a part of the proceeds of crime, worth ₹55.50 crore, was allegedly diverted as investments to a few Dubai-based firms, engaged in rock boulders and sand aggregates, by the case accused.

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The trail of money showed that the alleged diversion of funds worth ₹55.50 crore occurred via hawala channels to Dubai after they had initially been diverted to a network of 30-35 shell firms, ED sources said.

From November 15, 2019, to November 4, 2020, 12 fraudulent TDS (Tax Deducted at Source) refunds were generated allegedly by an accused tax official, T Adhikari.

It was alleged that Adhikari had misused his access to the login credentials of his supervisory authorities to perpetrate the fraud at the behest of other accused persons. Last September, the ED submitted its chargesheet against several accused persons/ entities including, Adhikari and two businessmen.

It was alleged that SB Enterprises, a proprietary concern of a co-accused, businessman Bhushan Patil, had fraudulently obtained the hefty TDS refunds of ₹263.95 crore in lieu of genuine claims worth around ₹16 lakh spread over two assessment years, with the help of Adhikari. Adhikari was allegedly controlling and operating the bank account of Patil to divert the funds from SB Enterprises. Various cheques were deposited by him allegedly to transfer the funds from SB Enterprises to Patil’s private bank account.

The accused also allegedly transferred ₹55.50 crore from the savings bank account of Patil into three shell companies. “After diverting the funds in three shell companies, the funds were further diverted into the network of another 30-35 shell companies. From there, those funds were transferred to Dubai in some firms engaged in the business of rock boulders and sand aggregate,” an ED source said. The ED’s probe is based on a Central Bureau of Investigation (CBI) case registered by one of its Delhi units on receipt of a written complaint from the Central Board of Direct Taxes (CBDT)’s Additional Director General (Vigilance)-4.

ED sources said that out of the total ₹263.95 crore, assets worth ₹166 crore have been seized/frozen/attached provisionally. Besides immovable properties at Lonavala, Khandala, Karjat, Pune, and Udupi (Karnataka), flats at Panvel and Mumbai, the attachments included assets such as luxury cars (BMW X7, Mercedes GLS400d, Audi Q7) held in the name of accused persons.