Category: Income Tax

The Income Tax Department initiated search operation in the case of two major manufacturers and suppliers of refined lead, lead alloys and lead oxides on 07.12.2021. The search operation covered 24 premises spread over in the states of West Bengal and Uttar Pradesh.

During the search and seizure action, it has been noticed that these groups are involved in the suppression of taxable income by resorting to bogus purchases and inflation of purchases.

Investigations have categorically revealed that these two groups have booked bogus purchases of around Rs. 250 crore in the name of various individuals, proprietary concerns, and companies. Evidence gathered during the search operation further reveals that stock registers, transport documents, e-way bills etc. have been fabricated to make such bogus purchases. Several accommodation entry providers have admitted that they have supplied bogus bills without supply of material.

The analysis of documents seized from the business premises of one of the groups indicates the modus operandi of over-invoicing during the purchase of raw material in a systematic manner. The differential amount is received back in cash by the key persons of the assessee group. One of the employees of the group has admitted that invoices have been inflated by charging higher prices for better quality of goods than goods actually supplied.

Incriminating evidence in the form of physical documents and digital data indicating unaccounted investments made in cash in immovable properties has also been found and seized.

The search operations have resulted in seizure of jewellery valued at Rs. 53 lakh while four bank lockers are yet to be operated.

 Further investigations are under progress.

The Income Tax Department initiated search and seizure operation on 03.12.2021 on a prominent group of Surat, engaged in the business of construction of residential and commercial complexes, land transactions as well as real estate financing. The search action covered more than 40 premises spread over Surat and Mumbai.

During the course of the search action, various incriminating documentary and digital evidences have been found and seized including a parallel set of books of account in the case of group entities. The transactions of certain group entities have been found to be maintained in a highly coded manner but were successfully decoded by the search team.  A preliminary analysis of these evidences indicates unaccounted cash receipt of on- money of more than Rs. 300 crore on sale of flats / land which is not found recorded in the regular books of account. Evidences of unaccounted cash infusion by partners, bogus accommodation entry loans by payment of cash and unexplained cash expenses etc. have also been noticed. Further, deeper examination of physical books of account and incriminating evidences seized during the search action shows unexplained investments of more than Rs. 200 crore in real estate and more than Rs. 100 crore by way of loan financing.  

The search action has led to the seizure of unexplained cash of Rs. 4 crore and jewellery valued at Rs. 3 crore while more than a dozen bank lockers have been placed under restraint. The search action has led to the detection of estimated undisclosed receipts and suspicious nature of entries aggregating to more than Rs. 650 crore.

Further investigations are under progress.

The Income Tax Department initiated search and seizure operations on a prominent business group, engaged primarily in the manufacturing of stainless steel and metal pipes, in Ahmedabad on 23.11. 2021. The search operation covered more than 30 premises in Ahmedabad and Mumbai.

During the course of the search operation, a large number of incriminating documents, loose sheets, digital evidence etc. have been found and seized. These evidences contain detailed records of the group’s unaccounted income on which due taxes have not been paid. A preliminary analysis of evidence indicates that the group is indulging in unaccounted sales of goods and scrap in cash which is not recorded in the regular books of account.  Further, incriminating evidence of various malpractices such as unaccounted cash loans advanced and interest earned thereon, expenses incurred in cash, bogus expenses and purchases, unaccounted land investments etc. has also been unearthed. The deleted WhatsApp chat of a key person, detected during the search, revealed evidence of obtaining huge accommodation entries by the group to reduce its taxable income. Certain benami properties have also been identified.

The search action has resulted in the seizure of unaccounted cash of Rs. 1.80 crore and unexplained jewellery valued at Rs. 8.30 crore. So far, 18 bank lockers have been put under restraint. The search action has led to the detection of total unaccounted transactions exceeding Rs. 500 crore.

  Further investigations are under progress.

The Income Tax Department has carried out search and seizure operations on 01.12.2021 in respect of 2 groups engaged in the Retail Sales of Jewellery, Textiles and Home Appliances through their popular chain of Stores in Chennai, Coimbatore, Madurai and Tirunelveli. A total of 37 premises were covered in this action.

In the case of the first group, seized documents and other incriminating materials gathered during the course of the search have revealed, that, the assessee had been actively involved in systematically suppressing sales by manipulating their books of accounts. The extent of suppression of sales is found to be more than Rs. 1000 crore, over a period of several years.  It was also found, that, the assessee had made unaccounted cash purchases of about Rs. 150 crore in textile division and jewellery division, during the past few years.

In respect of the second group, incriminating material seized during the course of search, has revealed that the assessee group had obtained bogus bills from a set of parties to the tune of Rs. 80 crore and thereby suppressed taxable income. Evidences relating to the unaccounted purchases of gold have also been gathered. Besides, the assessee group is found to be debiting inflated making charges of jewellery. In addition, unaccounted rental receipts and the unaccounted scrap sales aggregating to Rs. 7 crore have also been detected.

The searches on the two groups have led to a seizure of cash of Rs. 10 crore and jewellery/ bullion worth about Rs. 6 crore.

Further investigations are under progress.

The Income Tax Department initiated a search and seizure operation on a prominent Kolkata-based Group, engaged in manufacturing of TMT Bars and structural construction materials etc. on 01.12.2021.  The search action covered more than 20 premises spread over West Bengal and Odisha.

The action unearthed various methods of tax evasion adopted by the group. A large number of incriminating evidences in the form of documents and digital data demonstrating high value unaccounted cash payments, unaccounted cash purchase and sales, suppression of production, etc. have been found and seized. A preliminary analysis of these evidences reveals that many paper/shell companies are run by the group to provide accommodation entries to its flagship concerns. These shell entities were found to have routed back their unaccounted money in the guise of share capital/unsecured loan into books of account. Such modus operandi has been admitted by one of the key persons of the group.

The search action has resulted in seizure of unaccounted cash of Rs. 75 lakh and jewellery valued at Rs. 2.26 crore while certainbank lockers have been placed under restraint. The search action, so far, has led to the detection of total unaccounted income of around Rs. 100 crore.    

Further investigations are under progress.

The Income Tax Department initiated search action on 24.11.2021 on a taxpayer in Delhi who has created a beneficiary trust and an underlying company in low tax overseas jurisdiction. The residence and business premises of the assessee were covered in the search action.

The search operation revealed that these undisclosed entities in low tax overseas jurisdictions were holding assets worth Rs. 40 crore in the form of immovable and movable assets. The taxpayer was availing handling services of a foreign Bank having branches in India that offers wealth management, financial planning, asset allocation, equity research, fixed income, investment strategies and fiduciary services.

During the search operation at his residence, corroborating evidences in the form of e-mails and documents have been found establishing his beneficial ownership of the foreign assets. In his statement recorded during the search, he has admitted to ownership of foreign assets. At the business premises, one hard disk containing data in the form of parallel set of books of accounts has been found. A preliminary analysis of such gathered evidences indicate understatement of domestic income to the tune of Rs. 30 crore from business undertaken in India.   

Further investigations are under progress.