An under-construction building in Bhalgalpur. Picture by Amit Kumar

Bhagalpur, Feb. 18: Builders in Bhagalpur have just not constructed buildings. They have also built on their capital in the past few years, feels the Income Tax (IT) department.

The IT department of Bhagalpur circle has sniffed conspiracy of builders as their attempt to hide their profit has had a direct impact on the tax being collected by the department.

The department alleged that during the past five years, Bhagalpur city has expanded towards Nathnagar in the west and towards Sabour in the east.

The town has witnessed a boom in construction of multi-storeyed apartments.

“At many localities in the heart of the city, people have started handing over their old houses to builders or promoters. But neither the land owners nor the builders have paid any tax against their capital gains in such big transactions,” an income tax officer said.

The department has started scanning such property-related transactions. “Transactions worth Rs 100 crore have been reported and if calculated the tax value could be more than Rs 20 crore,” a department official said. Sources said the department has sent notices to over 150 landowners and apartments in the locality.

Prasant Bhusan, the income tax commissioner, Bhagalpur circle, said: “The department has geared up to collect the tax on such sources of capital gains by plot owners who sell their properties for apartments, shopping complexes or houses. According to our calculations, Rs 100 crore of such capital gains was not disclosed and no tax was paid on the amount. Interestingly, the real estate dealers have now started utilising the agriculture lands in the adjourning localities of Bhagalpur City for making multi-storeyed apartments or shopping complex.”

Bhusan claimed during the past five years, under the jurisdiction of Bhagalpur Municipal Corporation and even 8-10km radius beyond its area, property transactions an estimated Rs 800 crore have been reported which came under the department scanner. “Despite such big deals, not a single rupee was paid as tax till today,” he said.

Sources said organised gangs of real estate dealers purchase the plots at low prices, or by capturing it forcefully, earning huge profit.

Bhusan said the department has attached over a dozen of such apartments including some plots for scrutiny.