Raids continue at Lilavati hospital for the second day: Sources

Mumbai's famous Lilavati Hospital continued to enjoy unwanted attention for the second consecutive day with Income Tax Department calling on their doors yet again.

According to sources, the I-T department is questioning the four trustees of the hospital.

The hospital in Bandra is governed by the Lilavati Kirtilal Mehta Medical Trust, which was formed in 1978. Seven of the 11 trustees are from the Mehta family.

The two trustees - Prabodh Mehta and Rashmi Mehta - have been accused in the Supreme Court of siphoning money from the hospital to a bank account in Liechtenstein.

The petition has been filed by a Delhi resident, Harsh Raghuvanshi, who claims that the Mehtas are using the hospital for money-laundering. The Supreme Court had asked the Central government and the Reserve Bank of India to follow up on his complaint.

The LGT Bank in Liechtenstein has given the Indian government a list of nearly 30 Indians who operated undeclared bank accounts there. It's not clear if the raids against the Mehtas are connected to that list, which has been shared with the Supreme Court by the government.

If the agency finds that the charitable trust siphoned off funds, then according to the I-T act the I-T department will tax the institute (a charitable trust is exempted from taxes).

On MOnday, Income Tax officials also searched the offices of Mayfair Realtors and Vestra Infrastructure in Mumbai - companies which had loaned money to the Lilavati Trust in 2002.

Responding to the raids, the hospital, in a statement said, "The I-T Department today has conducted a search operation at the Lilavati hospital which is their routine work and we are cooperating with them."