NEW DELHI: The Income Tax Department has recovered "unexplained" cash of more than Rs 50 lakh and some jewellery after it raided the businesses linked to a BSP MP from Bijnor in Uttar Pradesh, officials said on Thursday.
The raids were carried out on Wednesday against BSP MP Malook Nagar's group companies that are engaged in real estate and their associates.
"There were allegations that the group companies were having huge security premium reserves and massive liabilities in the form of loans and advances from related parties and other payables, even then they had advanced substantial loans to others.
"The sales of the group were not commensurate with the loans and advances shown," the Central Board of Direct Taxation (CBDT) said in a statement.
The statement did not identify the entity raided but official sources identified them as businessess linked to BSP MP Nagar from the Bijnor parliamentary constituency.
Bahujan Samaj Party (BSP) chief Mayawati, in September, had removed Nagar as the party's deputy leader in Lok Sabha and replaced him with Ram Shiromani Verma.
It has nine MPs in the lower house of Parliament.
During the search so far, the CBDT said unexplained cash of more than Rs 50 lakh and jewellery weighing approximately 2.5 kg have been found.
"The allegations regarding share premium have been found to be correct during the search. They are not commensurate with the income of the concerned shareholders, who could not explain their sources," the CBDT statement alleged.
It said that it was established during the raids that "more than 20 companies were found to be running from a single premise out of which many companies are dummy companies and do not show any operations."
"Companies are not having any worth but are showing significant amounts of share premium. The dummy companies are being used as conduit for layering of funds," it claimed.
The Board, administrative authority for the tax department, said, "One of the group members has financial interest in one UK-based foreign company and one property in London and the sources of investment are being examined."
"Incriminating documents relating to investments in many properties have also been recovered from several premises and the same are being investigated," it said.
The sources of investment in properties owned by the group are being verified, the statement said.
"Handwritten papers relating to certain payments/receipts have also been found during the search and are being examined," it said.
The taxman has found six bank lockers till now and further investigations are underway, the statement said.