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I-T Dept. Conduct Search & Seizure in Gujarat, TN Over Alleged Tax Evasion

The Income Tax (I-T) Department conducted search and seizure operations in Gujarat and Tamil Nadu earlier this week on suspicion of alleged tax evasion, the Central Board of Direct Taxes (CBDT) said in a statement on Saturday. In Tamil Nadu, 35 premises belonging to two private syndicate financing groups were searched on Thursday, leading to detection of undisclosed income of more than Rs.300 crores, said the board.

In Gujarat and Mumbai, it said, 23 premises belonging to a leading diamond manufacturer and exporter who also has business of making tiles, were searched on Wednesday, which unearthed more than Rs.160 crores in unaccounted income.

“The highlight of the search includes seizure of a large volume of uncounted data seized in paper as well as digital form, which was kept at secret locations under the custody of its trusted employees at Surat, Navasari, Mumbai,” said the CBDT.

The data includes proof of unaccounted purchases, unaccounted sales, taking accommodation entries for purchases against which cash is received, the movement of such cash and stock through angadia (courier) firms, keeping the unaccounted cash with angadias, investment of such unaccounted income for purchase of property and stock, etc., for the past five years, said the board.

The primary analysis of the data revealed that the assesse made unaccounted purchase and sale of small polished diamonds of about Rs.518 crores over the period, the CBDT said, adding that more than Rs.95 crores of diamond scrap was sold in cash generated from its manufacturing activities, which remains unaccounted for and represent its income.

The assesse accounted for sale of about Rs. 2,742 crores of small diamonds in its books during the period, against which a substantial part of purchases were made in cash, but the purchase bills were taken from accommodation entry providers, said the board.

Further, it said, the assesse was making its major purchases of rough diamonds through imports and making export sales of finished bigger diamonds through its company registered in Hong Kong, which is effectively controlled and managed from India only.

The data revealed that the assesse made purchases of Rs.189 crores and sale of Rs. 1,040 crores in the past two years through this entity.

“During the search, the complete financial transactions of real estate deals were found which led to the detection of unaccounted income of Rs.80 crores. Further, the sale transactions of shares pertaining to the business of tiles were examined, which led to the detection of Rs.81 crores of unaccounted income,” said the CBDT.   S-ET

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