NEW DELHI: The income tax department said on Friday its searches on a “hospitality group” has led to the detection of undisclosed foreign assets of more than Rs 1,000 crore, days after it conducted searches on Bharat Hotels that owns the Lalit chain of hotels and Cargo Motors. In addition, domestic tax evasion of more than Rs 35 crore has been detected, the Central Board of Direct Taxes (CBDT) said in a statement that did not name any entity.
The department said that may lead to lead to consequences under the Black Money Act, 2015, as also, action under the Income-tax Act, 1961. Foreign assets include investment in a hotel in UK, immovable properties in UK and UAE and deposits with foreign banks, the tax department said, adding that further investigations are in progress. It did not name the group.
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The tax department on Monday had conducted raids at the premises of Bharat Hotels chairperson and managing director Jyotsna Suri and her associates in connection with an alleged tax evasion case. Bharat Hotels operates several five-star hotels and resorts across the country and its flagship property is The Lalit in central Delhi.
Repeated calls and text messages to the group did not elicit any response till the time of going to the press.
The department had also raided the premises of Jyotsna’s brother Jayant Nanda, managing director of Cargo Motors, the largest dealer of Tata Motors’ commercial vehicles in the country. A known name in the auto business, Nanda has dealership outlets in Delhi, Gujarat, Punjab and Rajasthan. Sources had said that eight locations were covered in the raids which continued late into the evening. The tax department did not share any details of the operation. However, sources had said transactions of the two groups, which were being probed, were related.
Jyotsna, a former chairman of industry body Ficci, has been associated with the Bharat Hotels group since 1989 and took over as CMD in 2006 after the death of her husband Lalit Suri. Lalit Suri shot into prominence because of his close links with Congress but fell out with the party. A man known for his contacts across the political spectrum, he entered Rajya Sabha from UP with support from the BJP and the SP.
The tax department said that taking forward the mission of the government against black money, particularly undisclosed foreign assets, authorities conducted searches on January 19, on this group which has been on their radar for having substantial undisclosed foreign assets. The operation covered 13 premises in the national capital region.
“The group is a leading member of the hospitality industry, running a hotel abroad and a chain of luxury hotels under a prominent brand name, situated at various locations in India,” the CBDT said.
The search operation has so far resulted in seizure of unaccounted assets valued at Rs. 24.93 crore (cash of Rs. 71.5 lakh, jewellery worth Rs.23 crore and expensive watches valued at Rs.1.2 crore), the tax department said.
“Evidence seized during the search reveals that a large amount of black money was stashed abroad by the group, through the mechanism of trusts, formed in early 1990s in tax havens,” the CDBT said.
It said such foreign holdings of the main persons have remained hidden for decades beneath complex multi layered structures, located in different countries, ensuring secrecy. Search action further revealed that one of the close relatives of the promoter family was intentionally introduced as a front to ostensibly escape the provisions of domestic tax laws.
