28.08.2021: The IT Department carried out a search and seizure operation on 25.08.2021 on a group based in Maharashtra and Goa. The group is in the business of steel manufacturer and trader of Pune, Nashik, Ahmednagar, and Goa. Thus, the IT cell covered more than 44 premises in the search operation.
The departmental team found many incriminating documents, loose papers, and digital pieces of evidence were seized. Thus, the evidence detected during the search revealed that the group was engaged in the fraudulent practice of booking bogus purchases of scrap and sponge iron from various ‘fake invoice issuers’.
Further, the premises of fake invoice issuers were also covered during the search. Such invoice issuers have admitted that they supplied only bills but no materials and also generated fake e-way bills to show it as genuine purchases and to claim GST input credit.
Similarly, with the active support of GST Authorities, Pune, the “Vehicle movement tracking app” was used to identify fake e-way bills. The total bogus purchases identified from these parties, so far, is about Rs.160 crore. The verification is still in progress and the quantum of bogus purchases is likely to increase substantially.
Further, shortage of goods to the tune of Rs.3.5 crore and excess stocks of Rs. 4 crores was also found from the premises and the same has been admitted by the assessees. Unaccounted investment in property was also unearthed. Unaccounted cash of Rs. 3 crore and jewelry amounting to Rs. 5.20 crore has been seized from different premises.
Also, unaccounted silver articles of 194 Kg valued at about Rs. 1.34 crore has been found during the search and has been accepted and declared as additional income by the assessee.
So far, a total of Rs.175.5 crore of unaccounted income has been unearthed including unaccounted cash and jewelry, shortage and excess of stock, and bogus purchases. As of now, the search operation is still continuing and investigations are in progress.
Income Tax Raids: Media, Power, Textiles and Real Estate Group
25.07.2021: The Income Tax Department conducted a search operation on a major business group on 22.07.2012 under Section 122 of the Income Tax Act 1961. The Group turnover was found to be more than Rs 6,000 crore per annum. The search was Covering 20 residential and 12 business premises spread across 9 cities including Mumbai, Delhi, Bhopal, Indore, Noida, and Ahmedabad.
The group has more than 100 companies, including holding and subsidiaries. Thus, the search revealed that they were running several companies in the name of their employees, which had been used for bookings for bogus expenses and funds.
Further, during the search operation, several employees, whose names were used as shareholders and directors, admitted that they did not know about such companies and that their Aadhaar cards and digital signatures were given to them in good faith by the owner.
Similarly, some were found to be relatives who had voluntarily and deliberately signed the documents but had no knowledge or control over the business activities of the companies in which they should be directors and shareholders.
These companies have been used for multiple purposes; Book bogus expenses and deduct profits from listed companies, invest in small companies to make investments, conduct circular transactions, etc. For example, the nature of such bogus expenditures differs from the supply of manpower, transportation, logistics and civil works, and counterfeit trade payments.
Using this modus operandi found so far, the rate of loss of income is Rs. Crore crore crore over a period of years. However, Quantum could be more because the group has used multiple layers and an investigation is underway to trace the entire money. In addition, it violates S2 (76) (vi) of the Companies Act and Section 49 of the listing agreement prescribed by SEBI for listed companies. Applications to the Anonymous Transactions Act will also be examined.
Similarly, the transfer of funds between group companies engaged in monetary trade and non-related business Rs. 2,200 crore have been found. The inquiry has confirmed that these are fictitious transactions without any actual movement or distribution of goods. Tax results and violations of other laws are being investigated.
The real estate component of the group operating the mall was sanctioned a term loan of Rs. 7 crores from a nationalized bank. Out of which Rs. 408 crores has been diverted to sister’s concern as a loan at 1% lower interest rate. Also, it is found that the real estate company is claiming interest expense on its taxable profits, it has been diverted to the holding company’s personal investment.
The listed media company makes speculative deals for advertising revenue, thereby acquiring real estate in exchange for actual payments. Evidence of cash receipts has been found for subsequent sale of such properties. This is under further investigation.
The department has found evidence that shows the receipt of cash on the sale of flats by the group’s reality arm. It is confirmed by 2 employees and 1 director of the company. Modus operandi as well as revised documentation have been found. The exact amount of books cash is being calculated.
Similarly, a total of 26 lockers have been found in the residential premises of the promoters and key employees of the board of directors. The abundant material found during the search operation is being investigated. Also, the search is on and further investigations are in progress.
Income Tax Dept. Seizes unaccounted cash of Rs. 14 crore
29.12.2020: The Income Tax Department conducts search operations in Delhi Region. The action is taken place on hawala operators engaged in the activities of routing and handling of unaccounted cash.
The search found that various fake companies were opened for raising bogus purchase and sales bills. Similarly, the said operators were routing unaccounted funds through several layers of bank accounts. Also, these operators were closing down the previous companies in two months’ time and used to form new ones.
Further, the department found incriminating documents suppressing sales and bogus purchases in excess of Rs. 300 crore. Thus, until now the department has seized unaccounted cash of Rs. 14 crores and Bullion worth Rs. 2 crores. Further investigation is still in progress.
IT Exposes Undisclosed Income of Rs. 100 crore
26.12.2020: In the case of three leading contractors in North-East India, the Income-tax Department launched a search and survey operation on 22.12.2020.
One of the groups is also in the hospitality business. Search and survey operations are being carried out at 14 places in Guwahati, Delhi, Silapathar, and Pathla (Assam).
The main charges framed against the three groups are that they have taken accommodation entries in the form of nongenuine unsecured loans and also securities premium from dubious Kolkata based shell companies.
These three groups have hidden their net profits across the years and routed back into business the unaccounted income through entry operators based out of Guwahati and Kolkata.
During the search operation, it has been established that the shell companies from which loans/premiums were taken exist only on paper and do not have an actual business.
The accused admitted that the unsecured loans/shares premiums from the shell companies to the groups are un-genuine and bogus.
Evidence of cash flow of funds through securities premium was discovered during the search. It has been installed at an estimated cost of Rs. 65 Crore has been sent to regular books in shell companies which actually represent the unaccounted income of this group.
Further investigation is underway to find out exactly what is involved in tax evasion using this modus operandi.
During the search operation, it was assumed that a maximum of 50% of the hospitality business in a group had a large number of cash transactions.
It has been further aggregated that some elements of the group are engaged in jewelry cash purchases. The source of the cash purchase is for inspection.
So far, jewelry worth Rs 9.79 lakh has been seized. The source of income for the remaining jewelry is Rs. 2 crores is under verification. Cash worth Rs 2.95 crore has also been seized.
Overall, approximately Rs. 100 crore has been recovered during search and survey operation.
IT Raid of Rs. 863 Crore in Tamilna du and Pune Region
16.12.2020: The income tax department carries search operation in Tamilnadu and Pune region last week. The department detects an unaccounted income of Rs. 700 crore from Tamilnadu. On the other hand, from the Pune region, it found Rs. 163 crore.
About Searches in Tamilnadu
The IT department conducted a search and seizure operation on the premises of a leading business group operating from Chennai on 09.12.2020. The search covered around 60 places in Chennai, Trichy, Coimbatore, Andhra Pradesh, Karnataka, and Mumbai. The group involved in business activities like cement production, logistics, construction, etc. The total unaccounted income values to Rs. 700 crore. Below is the list of unaccounted income.
- Unaccounted cash of Rs. 23 crore
- Foreign assets of Rs.110 crore
- The bogus claim of depreciation and others Rs. 435 crore
- Capital gains amounting to approximately Rs. 280 crore
Pune Region Search Details
In the case of leading builders and entry operators in the Panvel area of Pune, the Income Tax Department conducted a search and survey action on 10.12.2020. Search and survey operations were carried out at 2 locations in Panvel and Vashi.
The search team found unaccounted income receipts by way of on-money from flat and land sale from real estate projects of the group. It was received in the form of accommodation entries of non-genuine unsecured loans through certain shell companies. Thus, the total unaccounted income found is Rs. 163 crores.
IT Raid In Tamilnladu Detects Unaccounted Income of Rs. 1,000 crores
The search has revealed evidence related to investment in a Singapore-registered company. Also, The shareholding pattern of this company comprises of two companies. One is the owner of the group, while the other is a subsidiary of a major infrastructure development and financing group.
Further, The Department notes the suppression of foreign income received in the form of share subscriptions equal to Rs. 200 crores. The said amount is taxable in the hands of shareholders in India. Thus, the department will initiate the proceedings under the Black Money Act, 2015 for not disclosing foreign assets / beneficial interest in the FA schedule of income tax returns. The present value of this investment is more than Rs. 354 crores.
Apart from this, the search also revealed that the group had purchased around 800 acres of land. The said land was purposed for at least Rs. 500 crores, in the name of various fake companies.
Similarly, the IT department notes there was a transfer of shareholding at a price much lower than market value. Thus, the total search led to an undisclosed income of Rs. 1,000 crores. However, the assessee discloses the additional income of Rs. 337 crore out of above-undisclosed income.
Procedure of Income Tax Raids in India
The raids in India are conducted as per the Income Tax ACT 1961. The legal terms under income tax for the raid are Search and seizure. Thus, section 132 of the income tax act 1961 covers the scope of raids in India. It also includes the rights of Income Tax officers who can conduct such raids to recover undisclosed income.
Who can Conduct Raids of Income Tax Department?
Below authorized persons can conduct search and seizure as and when needed.
- Additional Director
- Additional Commissioner
- Joint Director
- Joint Commissioner
- Assistant Director
- Deputy Director
- Assistant Commissioner
- Deputy Commissioner
- Income-tax Officer
When the Income Tax Department puts Raid?
The Income tax department can put raids in the following situation occurs.
- Any person to whom Summons issued and he/she has not replied to it within the given period of time.
- Fails to produce the required documents as asked in the summon/notice.
- Income not disclosed in the income tax return like money, bullion, jewelry, or other valuable article.
What can be searched by the Department during Raids?
- The officer can enter any building, place, vessel, vehicle or aircraft for conducting searches.
- Wherever he has reason to suspect that such books of account, other documents, money, bullion, jewelry, or other valuable article or thing are kept.
- The office can break or open the lock of any door, box, locker, safe, almirah, or other articles to access the objects.
- Search any person who is a suspect of hiding undisclosed income.
Income Tax Raids on Film Industries
The IT department conducted a raid on a Film Producer, a well-known Actor, his Distributor, and Financier in Tamil Nadu on 05-02-2020. It was reported that unaccounted cash of about Rs 77 crore was recovered.
Also, the IT department recovers a large number of property documents, Promissory notes, post-dt. cheques as collateral security. Thus, the department counts as non-disclosure of income at an estimate of Rs.300 crore.
Further, As per the ANI report the raid put by the income tax department on Actor Vijay Panaiyur. Thus, it said the IT raid held in connection with the success of a recent box office film hit which collects around Rs. 300 crore.
Frequently Asked Questions
It is a search process to recover the cash, property, jewelry, etc from the person, who does not disclose to the department.
You can call on 18001801961/1961 and ask for help.
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