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Fraudulent TDS withdrawal case: Bizman used ₹33.87 crore to purchase and renovate a restaurant
The Enforcement Directorate (ED) has discovered that one of the accused in a tax refund fraud case, Rajesh Shetty, used the proceeds to renovate his restaurant and purchase a new one. The ED has seized assets worth ?166 crore so far in connection with the case.
Mumbai: The Enforcement Directorate (ED) which is probing a tax refund fraud of ₹263 crore discovered that one of the three accused in the case, Rajesh Shetty, a businessman, had allegedly renovated his restaurant and purchased a new one using the proceeds.
Last week, the ED arrested a former Income Tax (IT) official, Tanaji Mandal Adhikari, and two businessmen Bhushan Patil and Shetty in connection with the TDS fraud case.
Shetty had allegedly received ₹33.87 crore from co - accused, which was deposited to his wife’s bank account and the current bank accounts of his firm, and restaurant - cum - bar.
A substantial chunk of the crime proceeds in the case, which include around ₹55 crore was diverted to shell firms by another accused, is being traced for recovery by the agency, sources said.
“Shetty had utilised the proceeds of crime to purchase various immovable and movable properties. He also renovated his existing restaurant and invested in the procurement of a new restaurant,” a source said.
The accused had further transferred the proceeds of crime allegedly to various other close relatives and associated persons. “Investigation to trace the proceeds of crime is under progress,” the source said.
The fraudulent refunds were undertaken by a few accused persons, including Adhikari, a senior tax assistant, who had allegedly misused his access to the login credentials of his supervisory authorities to perpetrate the fraud at the behest of other accused persons, ED sources said. It was alleged that an accused firm, SB Enterprises, a proprietary concern of the arrested co - accused, 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.
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.
The ED’s probe revealed that from November 15, 2019 to November 4, 2020, a total of 12 fraudulent TDS refunds were generated allegedly by Adhikari.
“It is found that a total 12 fraudulent TDS refunds amounting ₹263. 95 crore were received in the current bank account of SB Enterprises with the State Bank of India,” a source said. The entire proceeds of crime were allegedly routed into the bank account of Patil and from there, its further diversion took place, the source said.
Adhikari allegedly had access to various debit/credit cards of personal bank accounts of Patil, so that he could withdraw/transfer money whenever required. Adhikari also allegedly transferred Rs. 55.50 crore from the saving bank accounts of Patil into shell companies, the source said.
“The investigation to trace the proceeds of crime amount, including ₹55.50 crore diverted to shell companies, is being conducted. Adhikari projected or claimed the proceeds of crime as untainted by transferring in other’s name,” the source said.
ED sources said that out of the total proceeds of crime of ₹263.95 crore, assets worth ₹166 crore have been seized/frozen/attached provisionally so far. 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.
