These realty companies and rich socialites have come under I-T scanner

These realtors, rich socialites now under I-T scanner

  • New Delhi,  May 9, 2016  
  • |  
  • UPDATED   10:49 IST
These realty companies and rich socialites have come under I-T scanner
Union finance minister Arun Jaitley has stepped up the war to remove black money from the economy. Photo: Mail Today

Several real estate firms, hospitality companies running holiday resorts and rich socialites residing in metros have come under the income tax (I-T) department's scanner as they have declared annual farm incomes ranging from Rs 1 crore to Rs 9 crore to claim exemption.

A senior finance ministry official told MAIL TODAY that information received from field formations of the I-T Department shows that some real estate companies with large land banks have been showing income of even Rs 5-9 crore as agricultural income. The I-T department is now investigating these declarations to see whether such huge sums have been declared as farm income to evade taxes and convert black money into white as farm income does not come under the tax net.

Hospitality companies running luxurious holiday resorts have been showing incomes of Rs 4 crore or more as agricultural income as they claim their ventures to be 'farm and holiday resorts'. Interestingly, some socialites have also been declaring farm incomes of above Rs 1 crore in their I-T returns, which are exempted from tax, but are then available to the person for investing in other ventures as it becomes white money.

According to agricultural experts, the figures appear to be 'highly inflated' as farms do not yield such high earnings. The finance ministry official refused to divulge further details of these entities as such disclosures are not permitted under the I-T Act.

The nationwide data collected by I-T officials shows that while some of these entities have been showing the farm incomes regularly over the last five years, there are others whose tax returns show farm incomes suddenly appearing in the last two years of the 2004-2013 period, which is being investigated.

According to sources, the Rs 2 lakh crore figure for the declaration of farm income estimated on the basis of a Right to Information Act reply appears to be exaggerated as large-scale errors in filing of these farm incomes has surfaced. "Data operators who feed the figures into the I-T department's computers have in many cases punched the same number more than once leading to highly inflated figures," an official told Mail Today. "For instance, a farm income figure of Rs 65,000 has been fed as 6500065000, which has ended up converting Rs 65,000 into Rs 650 crore," the official explained. There are also figures for farm incomes in the above-Rs 1 crore per annum category that appear genuine in the case of companies which supply high-yielding varieties of seeds to farmers nationwide and grow these across large tracts of land.

Similarly, there are several cases of land acquired by the National Highways Authority of India or the Railways for infrastructure projects that have generated income in excess of Rs 1 crore for land owners.

"The issue pertaining to the farm route being used to evade taxes or converting black money into white is being investigated thoroughly and the government will not leave any stone unturned to get to the bottom of the matter," the finance ministry official said.

The I-T department is reported to be investigating 2,746 such cases nationwide with Bengaluru recording the highest of 321 followed by Delhi with 275 and Kolkata with 239 cases in the top three cities in the list.

(In association with Mail Today Bureau)