According to a statement released on Saturday (September 18,2021), the Income Tax department discovered bogus contracts and dubious circular transactions worth more than 200 crores during a search and seizure operation at various locations linked to prominent film actor Sonu Sood.
After searching the actor's Mumbai home for three days, the Income Tax department said in the statement that he and his aides had evaded taxes totaling more than Rs 20 crores.
Sonu Sood recently announced a collaboration with Delhi's Aam Aadmi Party government led by Arvind Kejriwal.
According to the tax department, Sood's non-profit raised Rs 2.1 crores from overseas donors through a crowd funding platform, in violation of the Foreign Contribution (Regulation) Act, which governs such transactions.
According to the report, the actor's charity foundation, which was established in July of last year, has received Rs 18.94 crores in donations since April 2021, of which Rs 1.9 crores has been spent on relief efforts, while the remaining Rs 17 crores is sitting in the foundation's bank account.
According to the Central Board of Direct Taxes (CBDT), incriminating material relating to tax evasion was discovered during a search of the actor's and his aides' residences.
The search operation covered a total of 28 locations in Mumbai, Lucknow, Kanpur, Jaipur, Delhi, and Gurgaon.
Sonu Sood could not be reached for comment right away.
Tax evasion evidence is incriminating
The I-T department in the statement said, "During the course of the search at the premises of the actor and his associates, incriminating evidences pertaining to tax evasion were discovered." The actor's main strategy had been to route his unaccounted income through bogus unsecured loans from numerous bogus entities. So far, investigations have revealed the use of twenty such entries, the providers of which have admitted under oath to providing bogus accommodation entries. They have agreed to accept cheques in lieu of cash.”
It went on to say, "In some cases, professional receipts have been disguised as loans in the books of accounts in order to avoid paying taxes. It has also been revealed that these bogus loans were used to make investments and purchase real estate. So far, the total amount of tax evasion discovered amounts to more than Rs. 20 crore."
According to the department, which is still conducting search operations and investigations, Sood has invested significant funds in an infrastructure group in Lucknow for a joint venture real estate project, and irregularities in the group's account books have been discovered.
"The simultaneous search operations conducted at various premises of an Infrastructure group in Lucknow, in which the said actor has entered into a joint venture real estate project and invested substantial funds, have resulted in the unearthing of incriminating evidences pertaining to tax evasion and irregularities in the books of account," the I-T department stated.
During the search, Rs 1.8 crores in cash was also seized, and 11 lockers were placed under prohibitory orders.
"The investigation has revealed that the aforementioned Group is involved in bogus billing of subcontracting expenses and fund syphoning. So far, evidence of such bogus contracts has totaled more than Rs. 65 crore. Evidence of unaccounted cash expenses, unaccounted scrap sales, and digital data proving unaccounted cash transactions were also discovered. Furthermore, it has been discovered that the aforementioned Infrastructure Group/company engaged in a dubious circular transaction worth Rs. 175 crore with a Jaipur-based infrastructure company. Additional investigations are being conducted to determine the full extent of tax evasion", the department stated.
Sood was defended by Kejriwal
The actor rose to prominence after assisting thousands of immigrants to return home after the government imposed a lockdown in March 2020 in response to the Covid-19 pandemic.
Sood was recently appointed as an ambassador for the AAP's student mentoring programme. The AAP has condemned the actor's treatment, claiming that the government is targeting him because he is a "messiah" for the poor.
Arvind Kejriwal, the Chief Minister of Delhi and an AAP leader, tweeted in support of Sood, saying the Bolly wood actor has the prayers of millions of families he has helped in difficult times.
According to the I-T Department, the actor's Charity Foundation, which was established on July 21, 2020, has received donations totaling Rs 18.94 crores from 01.04.2021 to date, of which Rs 1.9 crores has been spent on various relief efforts, with the remaining Rs 17 crores lying un-utilized in the foundation's bank account.
The Shiv Sena also backed Sood, linking the I-T searches to the actor's decision to become a brand ambassador for the Delhi government.