The Income Tax Department raids the premises of former fund manager Viresh Joshi

The Income Tax Department has raided premises belonging to former chief trader and fund manager of Axis Mutual Fund, Viresh Joshi, in connection with alleged tax evasion.

The raids took place on Saturday.

Joshi was fired in May by the Axis Asset Management Company over allegations of front-running. Axis Bank said it had suspended Joshi and other fund managers on May 4 on suspicion of charges.

Joshi had been on the IT department’s radar since May after it was discovered that the latter was in possession of a Lamborghini and luxury apartments in Mumbai.

It has been alleged that Joshi acquired all of this allegedly through Vanguard.

The IT department recorded statements from Joshi and a few other brokers. They gathered information from SEBI before conducting searches at the premises linked to them.

Joshi was accused of taking bribes from brokers instead of sharing tips. It was also alleged that brokers used to pay him on a monthly basis. Joshi is said to have invested in mutual funds buying many midcap and smallcap stocks for the benefit of brokers and himself.

The IT department had formed a team of its elite managers in May to investigate the alleged Axis Mutual Fund scam. Since then, about 12 fund managers, including Joshi, have been on the IT department’s radar.

The income tax department was surprised because the alleged defendants did not provide information about their real estate in the tax return which was later detected.

The IT department, in its preliminary investigation, found that the fund managers had a number of trading and non-trading assets that they allegedly concealed on their tax return. They had even demonstrated that they did not derive any income from their property.

The IT department learned that fund managers were collecting rent on their properties on which the tax was not paid. The department is also looking into their source of income, how fund managers were able to purchase luxury apartments and other properties.

Now the fund managers are facing a tax evasion case and it is also possible that they are facing a parallel investigation into their source of income.

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Dolores W. Simon