Saturday, May 25, 2024

I-T notice throws up many questions

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A recent show-cause notice issued by the Income Tax Department to former chief minister N Chandrababu Naidu has stirred a controversy, shedding light on alleged suspicious financial transactions involving two companies linked to him – MVP Consults and MVP Co.

The show-cause, a copy of which is in the possession of The Pioneer, has brought to the fore a series of incriminating documents and papers discovered during a search and seizure operation targeting MVP Consults and its promoters.

The recovered documents suggest that MVP Consults and MVP Co. have engaged in a web of financial transactions, including fund transfers to various companies and individuals. Notable among these transactions is the movement of funds from entities such as L&T Construction, Shapoorji Pallonji & Co., Water Front Pvt. Ltd., and others to these two companies.

Of particular concern is the involvement of several individuals in these financial dealings. Notably, Naidu’s personal secretary, Srinivas, is alleged to have facilitated cash deliveries to individuals on Naidu’s behalf. Furthermore, funds received from MVP Co. and its associated companies are said to comprise undisclosed income, placing Naidu under scrutiny.

The scope of the investigation extends to several companies associated with Naidu, examining their role in these transactions. Auditors and other officials from MVP’s promoters, including Atul Soni, have also been named in the show-cause notice. A notable revelation in the notice pertains to Naidu’s financial dealings with a Dubai-based party, TOP. Documents indicate that substantial payments, totalling Rs 15.13 crore, were orchestrated and made to Naidu in Dubai.

The Income Tax Department is demanding an explanation for these transactions.

Beyond the TOP-related transactions, the notice brings attention to various other financial transactions, raising questions about the source of funds received by Naidu. It identifies several companies, such as Annai Infra Developers, Haigreeva Infratech, Shalaka Infrastructure, and Phoenix Infrastructure, which allegedly made payments to MVP Co. and MVP Consults, purportedly channelled to Naidu. Shapoorji Pallonji, a renowned conglomerate, is also mentioned as having made multiple payments to these companies.

Furthermore, the notice delves into the financial interactions between L&T Construction and Pour Trading Pvt. Ltd., a company operated by Naidu. Allegedly, L&T Construction transferred funds to Pour Trading Pvt. Ltd., which were subsequently believed to have been directed to. Naidu.

The notice unravels the involvement of local individuals in these transactions, with some being identified as recipients of cash deliveries arranged on Naidu’s behalf by his personal secretary, Srinivas.

The show-cause notice issued by the Income Tax Department alleges Naidu’s involvement in numerous questionable financial transactions involving MVP Consults, MVP Co., and their affiliates. It meticulously scrutinises a selection of these transactions, demanding a comprehensive explanation from Naidu regarding the mentioned documents and financial activities. The notice casts doubts on the origin of the funds received by Naidu and his associates, prompting a closer examination of their financial dealings.

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