Income Tax Department carried out search and seizure operations last week on a group based in Sangamner, Pune at 34 different locations across Maharashtra. The group entities are largely engaged in packaging and sale of tobacco and related products, generation and distribution of power, sale of FMCGs, and real estate development.
During the course of the search operation, hand written and excel sheets maintained on computer revealed unrecorded cash sale transactions amounting to Rs. 243 crore related to sale of tobacco. In addition to this, action on some dealers in tobacco products revealed further unrecorded sale by them amounting to Rs. 40 crore approximately.
The group is also accepting and paying cash over and above the registration value in transactions relating to real estate. Evidence of transactions amounting to Rs. 18 crore was found in this regard. Issues relating to violations of section 50C of the Income-tax Act, 1961 amounting to Rs. 23 crore have also been found.
During the course of the search operation, profit on unrecorded transactions of sale of real estate amounting to Rs. 9 crore has been accepted by the assessee. Seizure of unaccounted cash of Rs. 1 crore has been made. Total undisclosed income amounting to Rs. 335 crore has been detected so far.
In their raids on 22 premises of a Betul based Soya products manufacturing group in Madhya Pradesh, Mumbai and Solapur in Maharashtra and Kolkata, the IT officials found unexplained cash of over Rs. 8 crore and unexplained foreign currency of various countries amounting to more than Rs. 44 lakh and 9 bank lockers.
The group has introduced unaccounted income to the tune of Rs. 259 crore by way of introduction of Share capital at huge premium from Kolkata based shell companies, said the statement issued by the IT Dept.
It said the group has also introduced undisclosed income of Rs. 90 crore in its books of accounts by way of sale of paper investments in shell companies to another set of shell companies of Kolkata. None of the companies was found to be operational at their shown address and the group could not confirm the identity of such paper companies or any of its Directors. Many of these paper companies were found to be struck off by the Ministry of Corporate Affairs.
Shell companies
During the search, it was seen that bogus loss to the tune of Rs. 52 crore has been claimed by the group to suppress their profits, by indulging in intra-group out-of-exchange contract settlement. Various companies were formed in the name of employees to carry out these transactions, while there was no actual business carried out between them. Directors of these companies were not aware about any such transactions.
The group has also claimed incorrect Long Term Capital Gains exemption of over Rs. 27 crore on sale of shares of a group entity. Investigations revealed that the purchase of these shares was not genuine as group directors purchased shares of this entity at nominal value from non-existent Kolkata based shell companies. Various types of evidence including chats among key persons of the group reflects unexplained Cash payment and hawala transactions of over Rs. 15 crore.
Incriminating evidence in the form of digital media such as Laptops, hard drives, pen drives etc have been found and seized. From the investigation so far, undisclosed income over Rs. 450 crore has been detected. Further investigations are in progress.
