IT Probe Unearths Rs.725 Crore Bogus Political  Donation Network in Gujarat

AHMEDABAD :  What was recorded as political donations allegedly turned into a sophisticated tax-evasion mechanism, with the Income Tax Department uncovering alleged bogus contributions worth more than ₹725 crore routed through two Gujarat-based political parties. The investigations have now reached the Ahmedabad CID (Crime), putting party office-bearers, tax consultants and Chartered Accountants under scrutiny.

According to the complaints described in the investigation, the Swatantrata Abhivyakti Party, based in Naroda, was allegedly used to route bogus donations of about ₹519 crore, facilitating tax evasion exceeding ₹155 crore. In a separate case, the Nana Chiloda-based Garib Kalyan Party allegedly routed bogus donations of more than ₹206 crore, resulting in alleged tax evasion of over ₹62 crore.

The alleged modus operandi was straightforward but serious: taxpayers transferred money through cheques or RTGS as purported donations and received receipts that enabled them to claim tax deductions. The money was subsequently routed through shell entities, commissions were deducted and the balance was allegedly returned to donors in cash.

In the Swatantrata Abhivyakti Party case, the Income Tax investigation alleges that 8% to 9% commission was deducted before the remaining money was returned through a purported cashback arrangement. The funds were allegedly transferred to Jay Trading Company, described in the complaint as a bogus shell entity.

The investigation further alleges that the party’s primary objective was not political activity but commission earnings.

The complaint also names National President Surendra Tiwari, tax consultant Mehulkumar Khatri and CA Mayursinh Chandansinh Rathod. Rathod is alleged to have prepared and digitally signed contribution reports without verifying accounts and uploaded them to the Income Tax portal. A purportedly false donation report was also allegedly submitted to the Election Commission.

The second case involves the Garib Kalyan Party, where investigators allege commissions of 5% to 7% were deducted before money was returned to donors through shell entities including Krishna Enterprise and Jalaram Enterprise.

The investigation alleges that more than ₹1,295 crore in transactions passed through the bogus company network, while fraudulent deductions exceeding ₹134 crore allegedly caused a ₹62-crore loss to the exchequer.

The complaint names party president Neeraj Kumar Kshatriya, secretary Dhananjaysinh Rajput and treasurer Dhirajkumar Kshatriya, along with Abhishek Chandraprakash Tiwari, Pradipsinh Parihar and CAs Kuldipdan Tapariya, Ashokkumar Shah and Pankaj Agrawal.

These allegations remain subject to investigation and legal proceedings. Public records also show both parties participated in elections, making the Income Tax Department’s specific allegations about their activities and finances matters for investigators and courts to establish.