I-T department targets yet another top Hyderabad real estate firm in its search for investments by politicians

I-T department's latest target is a real estate firm with projects in prime locations in Hyderabad, especially its western parts.

BySouth First Desk

Published Dec 06, 2022 | 10:02 PM Updated Dec 06, 2022 | 10:03 PM

Hyderabad skyline

Continuing its crackdown on realtors and politicians in Telangana, the Income Tax (I-T) department carried out searches at properties belonging to a prominent city-based real-estate company in Banjara Hills and Jubilee Hills on Tuesday, 6 December.

Special teams from Hyderabad conducted the raids in connection with alleged tax evasion and other irregularities. In all, the sleuths of the I-T department carried out searches at over a dozen places, including the residence of the company’s founder and chairman, as well as its head office on Road Number 55, Jubilee Hills.

Searches were also conducted at the residences of some of the chairman’s relatives. Crucial documents and other material were seized during the raids, CBI sources said.

The sources said the raids were aimed at unearthing investments allegedly made in the company by key politicians of the ruling TRS in Telangana.

A few weeks ago, the I-T department conducted similar raids on other real-estate companies in the city after receiving information that several politicians had invested money in these firms.

Related: Anxious days, sleepless nights as I-T targets real estate firms

Top firm, prime projects

According to the sources, the flagship construction company is well known, with projects in prime locations in Hyderabad. It has completed construction of several posh apartments complexes in the twin cities, especially in its western parts.

A few months ago, the I-T department had first gathered information about prominent real-estate and infra companies and later carried out searches.

A few days later, it focused on some politicians who were found to be invested in real-estate and educational institutions.

As part of the raids, the department organised raids at the properties of Labour Minister Ch Malla Reddy and his educational institutions recently. The raids were also conducted at the residences of the minister’s relatives.

Similar raids were also carried out at the office and residences of a well-known pharma company in the city suburbs.

Tuesday’s raids on the prominent real-estate company made it clear that the I-T department is focused on probing investments made by prominent realtors and several politicians in the real estate business.

The real-estate business registered a slump due to the Covid-19 pandemic, but after restrictions were lifted completely, it picked up pace, prompting realtors to launch projects in the plush Banjara Hills, Jubilee Hills, Kukatpally, Miyapur, Kompally and the IT corridor covering Madhapur and Gachibowli, with exciting offers to lure customers.

Related: After realtors, bureaucrats under the scanner of I-T teams

Investments by politicians?

Waking up to the potential of huge profits in the real estate business, several politicians, mostly from the ruling party, invested in real-estate with the help of their business friends in the industry. The hype created by the realtors apparently encouraged the politicians to invest huge sums of money.

With the announcement of the Regional Ring Road (RRR) by the central government, most realtors purchased large tracts of land in the areas between RRR and the Outer Ring Road (ORR) to launch new ventures.

However, the I-T department, which maintains track of the financial transactions of companies, began gathering information about the companies that launched new projects, and the offers announced to woo customers.

During the raids, the I-T department stumbled upon the evidence that many politicians invested in the business to reap financial benefits in a short time.

It was then the department launched a crackdown on major real estate firms such as the Vasavi Group, Sumadhura, Phoenix, and Sreenidhi, among other companies.

Sources said the department was doing its homework before cracking the whip on the companies.

‘Raids impacting industry’

The gap between each of the raids carried out on the real-estate companies was an indication that the department was not only collecting crucial information about the company’s activities, but also constantly monitoring the financial transactions to zero in on any violations.

It is not clear to what extent the ongoing raids would affect companies’ operations and its customers, who booked flats in advance.

But the spate of raids since August 2022 to Tuesday’s search operation on yet another prominent real-estate company will mean anxious moments to many more big firms and their promoters in the city.

Many realtors strongly feel that these raids would have a major impact on the industry at a time when the most IT and ITeS companies are resorting to lay-offs, forcing employees to be cautious about buying a property through home loans.