B2B Startup Failed to Disclose ₹224 crore of Income: I-T   Dept.

The income tax department said on Sunday it has found evidence that a startup based in Pune and Thane has not disclosed ₹224 crore of income.

While the I-T department didn’t name the company, it is believed to be referring to Infra, Market, the construction materials startup that its officials raided last week.

In its Sunday statement, the I-t department said the company appeared to have booked bogus purchases, made huge unaccounted cash expenditures, and obtained accommodation entries totaling over ₹44 crore. During the search operations, ₹1 crore in unaccounted cash and jewelry worth ₹22 lakh were also seized, the department said.

Further, the tax authority said that when confronted of the group, “admitted under oath this modus operandi, disclosed additional income of than ₹224 crore in various assessment years. And offered to pay their due tax liability,” said in the press release.

The I-T department said it is investigating how the company obtained huge foreign funding via Mauritius by issuing shares at an “exorbitantly” high premium. These funds were routed through a hawala network involving shell companies in Mumbai and Thane, it said.

“These shell companies exist (only) on paper and were created only for the purpose of purpose of providing accommodation entries. Preliminary analysis has revealed that the total quantum of accommodation entries provided by these shell entities exceeds ₹15,500 crore,” the department said.

On March 9, tax officials searched the office of Infra.Market in 23 locations, including Maharashtra, Karnataka, and Andhra Pradesh.

In response to queries from ET, a spokesperson for Infra.Market said: “We continue to cooperate witch the authorities and provide all necessary information to the department. Since the matter is sub judice, we would not like to comment further”.

The raids came at a time when Infra. Market was reportedly stitching tougher a funding round from new and existing investors, looking to rise close to $450 million. At a valuation of more than $4 billion.

Infra. Market entered the unicorn club in January 2021 when it raised $100 million in a round lead by Tiger Global. It again raised $125 million from Tiger Global, catapulting its valuation to $2.5 billion.

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