The Income Tax department Thursday conducted raids on multiple properties of Hilal Rather, the son of former Jammu and Kashmir finance minister Abdul Rahim Rather, in connection with an alleged loan misappropriation and tax evasion case, officials said.
Hilal, a National Conference (NC) leader, may be soon charged under the criminal Anti-black Money law for holding undisclosed foreign assets, they said.
The searches have been conducted at 20 properties located in Srinagar, Jammu, Delhi-NCR and Ludhiana, the Central Board of Direct Taxes (CBDT) said in a statement issued late evening.
It, however, did not name Hilal or his group but said that the department conducted search and seizure operations on a prominent business group based in Srinagar that is engaged in the business of real estate and information technology.
"There were allegations of large scale diversion and misappropriation of loan taken from J&K Bank by the group," it said.
Hilal's father was the finance minister in the NC government.
"During the search, it was detected that the tax evader (referring to Hilal and his group) has been given illegal benefit of Rs 60 crore by J&K Bank. His outstanding loan of Rs 190 crore was settled at Rs 130 crore, although he did not deserve any concessional treatment," the Central Board of Direct Taxes said.
The CBDT is the policy-making body for the I-T department.
Additionally, it said, "even the reduced bank liability has either been defaulted by him or the re-payment has been facilitated by active connivance of bank officials who have ever greened his loan account by lending to third parties, who, in turn, gave their loaned funds to the tax evader through dubious financial transactions with him."
It also alleged that the main promoter of the group, suspected to be Hilal, was a director in a Dubai-based company.
"He is also holding and operating a foreign bank account. Neither his interest in the Dubai company nor the foreign bank account has ever been disclosed by him in his tax returns," the statement issued by CBDT spokesperson Surabhi Ahluwalia said.
It said Hilal "is likely to face action for deliberate omission to declare foreign investment as mandated by law" under the Anti-black Money Act that was brought by the Modi government in 2015 to combat cases of illegal assets possessed by Indians abroad.
It added that Hilal and his group "sold/booked part of his real estate project of Paradise Avenue near Jammu against unaccounted cash."
The cash component has neither been disclosed in tax returns by purchasers of the flats of Paradise Avenue nor has he disclosed these receipts in his books of accounts, it said.
The tax evader, the CBDT said while referring to the latest raids, has also undertaken real estate transactions "in his personal capacity or in the name of family members" where allegedly more than Rs 7 crore of unaccounted cash has changed hands.
It charged that during the demonetisation period, the group had made cash deposits of Rs 1.44 crore and the main promoter could not explain the source of these cash deposits during the course of the searches.
The transactions at the J&K Bank are already under the scanner of the department and the state anti-corruption bureau, and they have both conducted raids and launched investigation against its affairs in the recent past.
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