Jammu and Kashmir: Income Tax department carries out raids on prominent hotelier

New Delhi: The Income Tax Department carried out a search and seizure operation on a prominent Hotelier, owning a chain of Hotels at Srinagar, Gulmarg, Sonamarg and Pahalgam with another hotel under construction at Leh.

The department has seized various incriminating documents and materials evidencing unexplained investments in immovable properties, construction of hotels and residences aggregating to Rs 25 crore in the last six financial years during the search, according to Ministry of Finance statement.   

Notably, the hotelier has not paid any tax since AY 2014-15, and almost all these investments are in cash and outside the known sources of income.

During the search operation, receipt of unsecured loans to the tune of Rs 25 crore in the past two years from persons of no-means has been found, it said, adding that all these loans are prima-facie not genuine, as the same have been advanced by persons with doubtful creditworthiness.

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The search also revealed that the assessee’s children are studying in USA on whom expenditure of approximately Rs 25 lakh per annum is being incurred. The expenditure on account of education in USA prima-facie appears to be unexplained/ undisclosed. Further, the assessee is also running a B-Ed College as a Trust alongwith his mother. 

The Trust in not registered and no return is being filed for the Trust though it has substantial taxable income. The assessee has also admitted to having incurred expenditure of Rs 40 lakh on renovation of his residential house.

During the investigations, a bank locker has also been found, which has been put under restraint. The department also carried out searches in another case of a prominent jeweller in Srinagar. The hotelier had not maintained books of accounts of the jewellery business even though the turnover is of the range of Rs 2 crore to Rs 10 crore in the earlier years.

An undeclared bank account was maintained by the assessee with deposits running into crores of rupees, which has not been offered to tax. He also sold immovable property of Rs 1.90 crore in Srinagar in Financial Year (FY) 2015-16, capital gains tax on which has not been paid, he added.

The search also revealed that sale of a flat in Delhi was made by the wife of the assessee in FY 2019-20 of Rs 33 lakh. 
During the search, it was seen that no capital gains has been paid on the above sale. Further, out of the sale consideration of Rs 33 lakh, Rs 13 lakh has been received in cash in violation of provisions of Section 269SS of the Income-tax Act, 1961. The source of investment of buyer also seems prima-facie undisclosed, which is being investigated, the statement added.