The Income Tax department on Thursday started investigating the source of funds of companies that invested in BJP president Nitin Gadkaris company, Purti Power and Sugar Ltd (PPSL).

A top I-T official said prima facie shell companies (inactive firms used as vehicle for various financial manoeuvres or kept dormant for future use in some other capacity) had pumped money into Gadkaris company. We will trace the source of Purti's investor companies, he said.

I-T sources said a report would be submitted to the Central Board of Direct Taxes shortly. PR More, additional commissioner, I-T, (investigation, Pune),however, remained non-committal.

Gadkari is at the centre of a controversy over funding of PPSL with media reports claiming major investments and large loans to Purti were made by Ideal Road Builders (IRB) group, which had won contracts between 1995 and 1999, when he was Maharashtra PWD minister.

Gadkari has cancelled his trip to Delhi and will stay back in Nagpur.