12 July 2024 Income Tax >> Tax Laws  

Mumbai, July 12, 2024 - The Directorate of Enforcement (ED), Mumbai Zonal Office, has taken a significant step in its investigation into an alleged Income Tax Refund fraud amounting to Rs. 263 Crore. In a press release issued today, the ED announced the provisional attachment of assets worth Rs. 14.02 Crore under the provisions of the Prevention of Money Laundering Act, 2002 (PMLA).

The investigation, which originated from an FIR registered by the Central Bureau of Investigation (CBI), involves multiple sections of the Indian Penal Code (IPC), 1860, and the Prevention of Corruption Act, 1988. It centres around accusations of fraudulently generating and disbursing TDS refunds from the Income Tax Department totaling Rs. 263.95 Crore.

According to ED officials, Rajesh Brijlal Batreja is alleged to have played a crucial role in diverting Proceeds of Crime (PoC) amounting to Rs. 55.50 Crore outside India, reportedly with the assistance of Anirudh Gandhi. Subsequent findings indicate that a portion of these funds was concealed abroad, while another segment was purportedly invested in Indian companies based in Mumbai and Gurugram, using cross-border remittances under the guise of share investments.

Initial attempts at repatriating part of the diverted funds saw Rajesh Batreja voluntarily return approximately Rs. 1.70 Crore. However, allegations suggest that instead of repatriating the remaining funds, Batreja and Purushottam Chavan, another implicated individual, allegedly diverted and diluted the PoC. The investigation further alleges that both individuals engaged in concealing these funds within India and abroad, allegedly in collaboration with entities based in Dubai.

The press release noted that arrests have already been made in connection with the case, including Tanaji Mandal Adhikari, Bhushan Anant Patil, Rajesh Shantaram Shetty, Rajesh Brijlal Batreja, and Purushottam Chavan, all of whom are currently in judicial custody. A prosecution complaint against Tanaji Mandal Adhikari and 10 others was filed on September 11, 2023, and the Special (PMLA) Court has taken cognizance of the matter.

Including the recent asset attachment, the total value of seized and attached immovable and movable properties in connection with this case now amounts to approximately Rs. 182 Crore. The ED has confirmed that the investigation into this intricate financial fraud is ongoing and further actions may follow.