Rs 4 cr unaccounted cash recovered in I-T raids on Karnataka medical colleges, undisclosed income of Rs 100 cr detected

The Income Tax department on Friday said it has recovered a total of Rs 4.22 crore of unaccounted cash in raids on a prominent business group in Karnataka which runs multiple educational institutions.

In a statement, the department said during searches conducted on the group on October 9, it has unearthed the modus operandi of conversion of seats which were originally to be allotted by merit through counselling by MCC maliciously into institutional quota seats through dropout system.

While the I-T department did not name anyone, the raids were reportedly conducted at the premises linked to former Deputy Chief Minister G Parameshwara.

On Thursday, the Income Tax sleuths conducted raids at around 30 premises linked to Parameshwara.

"Incriminating evidence has been found in the search, substantiating conversion of seats, commission payments to brokers and sale of seats in exchange of receipt of cash. Evidence of use of multiple agents for the conversion of MBBS and PG seats have also been found," the I-T Dept said.

"Diversion of funds in the form of payment of on-money for the purpose of purchase of immovable assets for the benefit of trustees has also been established including finding of cash in possession of seller, commission in the hands of broker and strong written and audio evidence found in possession of the concerned parties," it said. 

"Evidence of handling of such cash generated, diversion for construction of hotels have also been found. Hawala transactions relating to the movement of such cash have also been established," it added. 

The department further said that a total of Rs 4.22 crore of unaccounted cash has so far been found including Rs 89 lakh in the house of the main trustee.

Evidence also reveal undisclosed investments in real estate. 

"Overall the total undisclosed income detected so far is around Rs 100 crore considering the cash donations received for 185 seats averaging Rs 50 lakh to Rs 65 lakh per seat and total seizure of undisclosed assets of Rs. 8.82 crore," the I-T Department said.