CJ Roy death: Why Kochi flat sales came under I-T radar

Entrepreneur CJ Roy, who rose to prominence in the real estate sector on the back of ambitious projects and rapid growth of the Kerala-based Confident Group, had come under the radar of the Income Tax (I-T) Department following allegations of tax evasion and lack of clarity over foreign investments. It has now emerged that I-T officials began closely tracking Roy after more than 100 flats sold in Kochi did not appear to be routine commercial transactions on the surface.

Also read: Cops find late CJ Roy's diary with names of celebrities, politicians

Following Roy’s death by suicide, several aspects of the case have come to light. One of the key discussions doing the rounds is whether pressure from I-T officials was among the contributing factors. Flats sold in Kochi last year were allegedly disposed of at prices far below their original value, leading to claims of tax evasion amounting to several crores of rupees. It was this discrepancy that prompted I-T officials to begin collecting detailed information on Confident Group’s financial dealings. Acting on inputs gathered through their own sources, I-T officials are said to have initiated search and inspection proceedings into Roy’s financial transactions.

Around 150 flats were sold in Kochi. While such volumes may appear routine for a large real estate company, I-T officials were alerted to a possible strategy of undervaluing properties to evade taxes. Typically, flats are sold at prevailing market rates. However, allegations surfaced that documents were created showing sales at prices significantly lower than the actual market value. According to Income Tax Department sources, flats with a market value of Rs 1 crore were shown in records as having been sold for just Rs 40-Rs 50 lakh.

Cash transactions

During raids conducted on Confident Group premises in Bengaluru, I-T officials reportedly uncovered evidence that a lower amount was shown in official records, while the remaining money was collected from buyers in cash. This method enables dual forms of evasion: stamp duty payable to the registration department is reduced, and the seller’s actual profit does not appear in official accounts, thereby avoiding corporate tax. Large sums of money were allegedly transferred in cash, converting them into black money, the I-T Department has stated.

Also read: Realty, television, and opulence: About CJ Roy, man behind Confident Group

After seizing documents, Kerala I-T officials expanded their probe beyond Roy’s offices to include his close associates. Digital evidence, bank transaction records and sale agreements were taken into custody. Scrutiny revealed that small amounts were routed through online transactions, while the bulk of payments were taken in cash. By evading taxes due to the government, the operation allegedly caused significant harm to the national economy. Since tax evasion was detected in Kerala, I-T sources indicated that similar irregularities may have occurred in Karnataka as well. This led Kerala I-T officials to travel to Karnataka and conduct inspections, according to I-T sources.

Fear of ED action?

While Roy was already under pressure from the Income Tax inquiry, he may also have been facing the looming possibility of action by the Enforcement Directorate (ED), which could have further intensified his anxiety. Tax evasion cases can often be settled through penalties imposed by the I-T Department. However, once the ED steps in, the consequences can be far more severe. If a case of money laundering were registered and investigated, Roy would have faced serious legal trouble.

There was also the possibility of arrest by ED officials. Roy had made investments not only in India but also in Dubai. If he failed to establish the source of funds for his Dubai investments, it could have landed him in deep trouble. IT officials have suggested that this pressure too may have weighed heavily on him.

Investment in Dubai without loans?

The scope of the investigation into Roy was not confined to India and extended to Dubai, where several projects had been launched. According to I-T sources, it is unusual in the real estate business to complete large projects without bank loans. However, Roy is said to have constructed and completed apartment projects in Dubai without availing any bank financing.

This raised serious suspicion within the I-T Department. Where did such large volumes of funds come from without any borrowing? This question reportedly became central to the inquiry, prompting officials to probe the source of these funds.

FIR against IT officials possible?

Meanwhile, the death of Roy could potentially land Income Tax officials in legal trouble. Police have currently registered a case of suicide and begun an investigation. If Roy’s family files a complaint alleging abetment to suicide, Kerala I-T officials may be forced into a legal battle.

After Roy’s death, his brother CJ Joseph publicly accused I-T officials, claiming their harassment led to his brother’s suicide. However, no formal complaint has been lodged at a police station so far. If the family does file a case alleging abetment to suicide, police can initiate an investigation. Such a probe could mark the beginning of a legal confrontation between I-T investigators and Roy’s family. The Karnataka government has ordered an SIT probe, but it will still be conducted within the framework of a suicide case. Legal experts believe the direction of the investigation could change based on the statements given by family members before the SIT in the coming days.

If Roy’s family registers a case under Section 306 of the IPC, which deals with abetment to suicide, it would be treated as a serious offence. The provision applies if a person is found to have physically or mentally instigated another to take their own life. Allegations have surfaced that sustained questioning, threats or actions that damaged Roy’s reputation may have pushed him into depression.

Speaking to The Federal Karnataka, advocate Swamini Ganesh said a case of abetment to suicide can be registered, but its outcome would depend on the seriousness of evidence available to the investigator. From a legal standpoint, questioning or seeking documents by an investigator does not amount to harassment. Personal abuse, illegal threats or coercion during inquiry could qualify as abetment, but these must be backed by concrete evidence. Baseless allegations alone cannot lead to action, she said.

Possibility of Centre-state friction?

Kerala I-T officials had travelled to Karnataka to conduct further investigations into tax evasion allegations against Roy and carried out searches at his offices in the state. It was during this period that Roy died by suicide. If Karnataka Police register a case against I-T officials, it could trigger political friction between the Centre and the state. The Congress-led Karnataka government has already been engaged in political confrontation with the Centre, and the Opposition BJP may accuse it of politicising the issue. Such concerns are now being voiced in political circles.

(This article was originally published in The Federal Karnataka)

(Suicides can be prevented. For help, please call Suicide Prevention Helplines: Neha Suicide Prevent Centre – 044-24640050; Aasara helpline for suicide prevention, emotional support & trauma help — +91-9820466726; Kiran, Mental health rehabilitation — 1800-599-0019, Disha 0471- 2552056, Maithri 0484 2540530, and Sneha’s suicide prevention helpline 044-24640050.)