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Rs 450Cr detected in I-T Department raids on MP based business

By TIOL News Service

NEW DELHI, FEB 22, 2021: EXTENSIVE searches by the Income Tax (I-T) Department on the premises of a soya products manufacturing group based in Betul and Satna, Madhya Pradesh, resulted in the detection of undisclosed income of over Rs. 450 crore.

The Ministry of Finance said on Monday the search and seizure operations were carried out on February 18 at 22 locations of the business across Madhya Pradesh, Mumbai and Solapur in Maharashtra and in Kolkata. Incriminating evidence in the form of digital media such as laptops, hard drives and pen drives were found.

Unexplained cash of over Rs. 8 crore and various foreign currencies over Rs. 44 lakh were seized while unaccounted income of Rs. 259 crore by way of Kolkata-based shell companies was found. The tax officers reported nine bank lockers and Rs. 90 crore undisclosed income in the books by sale of paper investments from one set of shell companies to another.

"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," said the investigators.

During the search, it was seen that fraudulent losses of Rs. 52 crore had been claimed by the group by 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 tax officers found.

The group has also claimed incorrect long-term capital gains exemption of over Rs. 27 crore on sale of shares. Investigations revealed that the purchase of these shares was at nominal value from non-existent shell companies.

Further, various types of evidence including chats among key persons of the group revealed unexplained cash payment and hawala transactions of over Rs. 15 crore.

From the investigations so far, an undisclosed income over Rs. 450 crore has been detected, with the searches likely to continue.


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