The income-tax department on Tuesday carried out searches at the offices of four business consortiums who were awarded contracts worth `700 crores for “overlays” for the just-concluded Commonwealth Games 2010. BJP leader Sudhanshu Mittal is one of the high-profile individuals whose offices and residence were searched by the tax sleuths.
Mr Mittal is a director of Deepali Designs and Exhibitions, which along with its international consortium partner PICO International were allegedly awarded contracts worth `230 crores. All the four consortiums have a foreign company as a partner. Mr Mittal was a close associate of late BJP leader Pramod Mahajan and is currently a member of the BJP’s national council. The I-T department also searched the office of a real estate firm, Ireo, where Mr Mittal is also said to be a stakeholder. Tuesday’s searches were carried out at 30 locations spread across New Delhi and the national capital region, Chandigarh and Ludhiana.
There had been a public outcry against these companies after it was revealed that they were supplying items like soap dispensers and treadmills for the CWG at many times their actual prices.
The other consortium whose Indian partner offices were searched include Comfort Net and Nussli India consortium, ESG Arena and D-Art furniture consortium and G.L. Litmus and Meroform consortium.
The I-T department is looking at the contract papers that were signed by the Games organising committee, invoices and other material to find cases of tax evasion. The department is also trying to look at the actual cost of the “overlays” as against those claimed by these contractors to arrive at the real profits earned by these companies.
According to sources, the I-T department had been quietly preparing the list of firms to be raided even before the Games had started. The department was waiting for the Games to be over before getting into action. “The I-T department was asked to conduct the raids soon after the Games ended so that the defaulters wouldn’t have the time to either change or destroy the papers needed to unveil the scam in the CWG,” said a finance ministry official.