Mysuru: The Income Tax (I-T) Department has seized Rs. 6.76 crore unaccounted money from PWD contractors in the State. The Department had raided several premises in Mysuru and Bengaluru, belonging to 11 PWD contractors.

Under the radar are contractors, who participate in government tenders, especially in the Public Works Department (PWD). A release from the investigation wing of the I-T Department (Karnataka and Goa) said the currency seized was in high denominations, Rs. 2,000 and Rs. 500.

The raids were conducted based on intelligence input that several contractors were in possession of huge stock of cash in high denominations.

“Raids were conducted by officials of the I-T Investigation Wing on one contractor in Bengaluru and 10 in Mysuru. They work on State government’s projects through tendering,” Income Tax Department Joint Commissioner G. Ramesh said in a statement.

Searches were carried out on contractors between April 24 and 26. “This resulted in seizure of Rs. 6.76 crore from four such contractors in Mysuru area. The entire amount seized was in high denominations. The cash found and seized is not reflected in the books of accounts maintained by the contractors,’’ the I-T release stated.

Though I-T officials were tight-lipped about the details of these contractors, sources said that PWD contractors namely Mariswamy, Lokesh, Karigowda and Prasanna were among those raided. Interestingly, the I-T Department hinted at the stocking of huge amount of cash by these contractors as one of the reasons for the severe cash crunch at ATMs in the poll-bound State.

‘’Hoarding of cash by contractors at a time when cash shortage was reported in some areas raises troubling questions. The bulk of the seizure was made from lockers of benami accounts,’’ the I-T release said.

With this, the total cash seized by the Department after the start of election-related surveillance has reached Rs. 10.62 crore. The Department has also seized jewellery worth Rs. 1.33 crore since the poll dates were announced.

The Income Tax Department had stepped up surveillance in view of the elections. In one of the raids, officials seized Rs. 55 lakh from a person. In another case, household articles valued at Rs. 9.51 crore intended for distribution were found stored in a warehouse near Mysuru.

The IT Department had asked the State Chief Secretary to furnish details of payments made to contractors in the last quarter of the just completed financial year in Karnataka to draw a comparison with previous years to identify any abnormal cases or payments that may have been made on the eve of the forthcoming Assembly elections.  

The data submitted by the government is being correlated with linked bank transactions and cash withdrawals, said an official source.

In view of the single-phase polls on May 12, the I-T Department has stepped up surveillance and monitoring activities to ensure a free and fair election.