Realty companies defaulted on tax too

By Abhishek Anand
According to IT documents available with TEHELKA, many real estate companies have in the past been caught under-reporting their income and evading tax. Raids carried out by the department last year unearthed Rs 800 crore of undisclosed income.
Companies that admitted under-reporting of income included Mumbai-based HDIL group along with two Mumbai-based developers Bombay Rayon and Electro groups; Delhi-based Modi and Mehta groups; Jaipur-based Agarwal group and Pune-based Panchshil group.
According to the income tax department, all these companies provided inflated expenses for purchase of materials, suppressed amount of professional income and indulged in cash transactions.
While Mumbai-based Electro group admitted undisclosed income of Rs 114.50 crore, HDIL (Housing Development and Infrastructure Ltd) made a disclosure to the stock exchanges about defaulting to the tune of Rs 350 crore. The other five companies admitted undisclosed income ranging from Rs 22.80 to Rs 85 crore.
In September this year, the income tax department had raided premises of some other real estate companies and found gross irregularities on their part. Prominent among those found guilty is the Delhi-based Amrapali group, which according to sources in the department has admitted undisclosed income of Rs 73 crore.