Fraudulent TDS withdrawal of ₹264 crore: ED to auction 3 seized high-end cars

The Enforcement Directorate (ED) will auction three high-end cars valued at ₹2.63 crore, seized during a money laundering probe related to tax refund fraud. The cars, including a BMW X7 and a Mercedes Benz GLS400D4matic, will be auctioned to secure their maximum value. The sale proceeds will be credited as proceeds of the crime in the case. The ED has seized/frozen/attached properties worth around ₹166 crore in the case so far, including the three cars.

MUMBAI: The Enforcement Directorate (ED) will conduct an auction of three high-end cars, valued at around ₹2.63 crore and seized during its money laundering probe related to alleged tax refund fraud of ₹263-95 crore, with a view to secure their maximum value as they are lying idle currently.

HT Image

Agency sources said the auction will be conducted through public sector undertaking, Metal Scrap Trading Corporation Ltd. The cars include a BMW X7 (with an acquisition cost of ₹1.22 crore), Mercedes Benz GLS400D4matic (acquisition cost of ₹1.16 crore) and an Audi Q7 (acquisition cost was ₹25.50 lakh), the sources said. The sale proceeds from the auction of the vehicles will be credited as proceeds of crime in the case, the sources said.

The Mercedes Benz is owned by Rajesh Shetty, the BMW X7 is owned by Sarika Shetty and the Audi Q7 is owned by Shambho Shisave. All three are named as accused in the case, ED sources said. The three cars are among the set of movable and immovable properties, estimated to be worth around ₹166 crore, which the ED has seized/frozen/attached provisionally in the case so far. Immovable properties include land parcels at Lonavala, Khandala, Karjat, Pune, and Udupi (Karnataka), and flats at Panvel and Mumbai, belonging to the accused.

The three cars were attached provisionally by the ED as part of its money-laundering probe into the case in January last year. The provisional attachments were later confirmed by the Adjudicating Authority. “Presently, the vehicles are idle and there is a possibility of their natural decay. Even if these high-value vehicles are to be maintained by the ED, the expense of maintenance is likely to exceed its value,” an ED source said.

The auction will be conducted for the highest price as per the provisions of the Prevention of Money Laundering Act (Taking Possession of Attached or Frozen Properties Confirmed by the Adjudicating Authority) Rules, 2013, and the Code of Criminal Procedure, the sources 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). 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. It was alleged that SB Enterprises, a proprietary concern, 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. Last September, the ED submitted its chargesheet against several accused persons/ entities.