Attempts to evade tax, shady financial transactions
Several incriminating documents seized for scrutiny
Mohinder Verma
JAMMU, Jan 6: Investigation Wing of the Income Tax Department today carried out simultaneous raids in the premises of 15 entities in Jammu and Delhi which are associated with IL&FS Transportation Networks Limited and its Financial Services in connection with alleged large scale evasion of tax and other shady financial transactions.
Reliable sources told EXCELSIOR that on the directions of the top brass of the Income Tax Department different teams of Investigation Wing started simultaneous raids in the premises of 15 entities—one in Jammu and rest in Delhi. Huge deployment of security personnel was made at all these places in order to ensure smooth operation by the Income Tax Department sleuths.
In Jammu, the raid was conducted in the premises of Beigh Construction Company at Narwal and neither any staff member was permitted to leave the premises nor anybody allowed inside during the operation which continued till late in the evening, sources said while disclosing that at all the 15 places the Investigation Wing of the Income Tax Department laid hands on incriminating documents.
“All these documents will be put to detailed scrutiny to work out exact quantum of income tax evasion and other shady financial transactions”, sources said, adding “activities of all these 15 entities directly associated with IL&FS Transportation Networks Limited and its Financial Services were being closely monitored by the Investigation Wing of the Income Tax Department during the past quite long time”.
Finally, on the basis of credible information it was decided to carry out raids in the premises of all these entities so as to put an end to their alleged ‘illegal’ business transactions, sources further said, adding “it is difficult to arrive at any conclusion as of now but definitely the activities of all these entities were aimed at evasion of income tax”.
It is pertinent to mention here that Beigh Construction Company, which has executed several transportation projects in Jammu and Kashmir including part of Chenani-Nashri Tunnel on Jammu-Srinagar National Highway, has its Headquarter in New Delhi and Registered Office at Narwal in Jammu. The IL&FS Transportation Networks Limited has executed several projects in Jammu and Kashmir and had also won Zojila tunnel bid in January 2018.
In 2019, the Enforcement Directorate had identified 14 entities to which the IL&FS Financial Services had extended loans to the tune of Rs 2,270 crore that remained unpaid. The funds were allegedly routed to the IL&FS Transportation Networks Limited (ITNL) and its subsidiaries as loans at higher interest rates, sources said.
Based on the documents seized during the investigation, the agency believed these entities, called third parties, were told to transfer the loans either to the ITNL or its Special Purpose Vehicles (SPVs) in the form of loan.
“By this modus operandi, ITNL and its SPVs received huge loans and Rs 2,270 crore (as per Grand and Thorton Report) remained outstanding against those parties to IFIN who in turn funded to ITNL or its SPVs,” the Enforcement Directorate had mentioned in the charge-sheet.
The third parties, which were used to route the funds, identified by the agency included Beigh Construction Company, New India Structures, Vistar Financers, Sangam Business Credit, Kalyan Sangam Infratech, GHV Hotels (I), Attivo Economic Zones (MUMBAI), Prakash Constrowell Ltd and Wavell Investments.
The ED also alleged that the IFIN had sanctioned loans to these third parties or contractors without proper collateral securities, following which they had entered into agreements with the ITNL or its SPVs. “The rate of lending was 1.5% to 2% higher than the rate of borrowing and thus, there was a profit to those third parties/contractors and being non-NBFC, they were not entitled for the same”, sources said, adding “the ED investigations also indicate that the illegal profit thus earned probably was shared with the ITNL officials and arrangers”.
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