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I-T raid unearths biggest taxpayer
April, 06th 2010

Move over Mumbai, Kolkata has arrived. The country's highest taxpayer could be from this city never mind the fact that he was forced to pay the whopping amount after an income tax raid. Santiago Martin has coughed up an unbelievable Rs 19 crore which, the West Bengal circle of the income tax department claims is perhaps the highest amount paid by a single assessee.

This has toppled last year's record of Rs 18 crore paid by Bollywood actor Akshay Kumar, whose total income for the year was Rs 63 crore.

Santiago is the sole distributor of West Bengal State Lottery, Sikkim State Lottery, Arunachal State Lottery, Meghalaya State Lottery and Royal Bhutan Lottery. Officers at the I-T department found out that M/s Future Distributors, which is the sole distributor of these lotteries and owned by Martin, had not filed any income tax return.

The officers started keeping a watch on the Taratolla premises of Future Distributors and started entering the office under the garb of potential stockists. Old files and other documents revealed that Martin had been floating lottery distributorship companies only to win a lot of cash from unsold tickets which he would never return to the lottery companies.

According to rules, all unsold tickets should be returned to lottery companies. "We have found details in Martin's accounts books to show that he has been winning constantly from unsold tickets, details of which have been meticulously maintained.
Most draws happen in remote places and people do not question the results that are printed in newspapers," said Sumit Dasgupta, the officer who led the raid under the guidance of additional commissioner Neeraj Singh.

"The moment he made his money, he would wind up the company and float another one. Naturally, it was difficult to nab him all this while," Dasgupta said.

Martin is a Class VII dropout started out by hawking lottery tickets. In 1981, he devised his ingenious plan of not returning unsold tickets and managed to win Rs 1.5 lakh. There was no looking back since.

He started taking sole distributorships of several state-backed lotteries. He floated and wound up companies in Tamil Nadu and Karnataka according to documents with the I-T department, evading huge amounts in taxes.

During the raid, it was found that incomes from unsold tickets were concealed in the accounts. Various indirect expenses including depreciation, transportation and remuneration to partners were inflated, which was also detected. The team of officers came across genuine books of accounts before any adjustments to lower the net profit was made. A strict vigil kept till the end of March, which flouted the attempts at manipulation of accounts books.

"This time, Martin was caught unawares, as the office of his chartered accountant was also covered along with the offices for unsold tickets and winning tickets," Dasgupta said. D C Pant, the chief commissioner of income tax, West Bengal, said: "I am extremely happy that we were able to round up an evader who was trying to duck taxes worth Rs 19 crore, which is certainly one of the highest ever paid by a single assessee."

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