The Income Tax Department carried out the search and seizure operations on two groups engaged in the business of perfume manufacturing and real estate, largely in Uttar Pradesh, informed the Ministry of Finance on Wednesday.
According to the ministry, more than 40 premises have been covered during the search operation in Uttar Pradesh, Maharashtra, Delhi, Tamil Nadu and Gujarat.
During the primary searches of the first group in Mumbai and Uttar Pradesh, it has been revealed that the group is involved in tax evasion by under-reporting sale of perfumes, stock manipulation, fudging books of account to shift profits from taxable unit to tax-exempt unit, inflation of expenditure, etc.
"Evidence found in the sales office and main office has revealed that the group makes 35 per cent to 40 per cent of its retail sales in cash by 'kucha' bills and these cash receipts are not recorded in the regular books of account, running into crores of rupees. Pieces of evidence of booking purchases from bogus parties to the extent of about Rs 5 crore have also been unearthed," the ministry informed.
The analysis of incriminating evidence indicated that unaccounted income so generated is invested in various real estate projects in Mumbai, acquisition of properties both in India and The United Arab Emirates (UAE).
"It has also been detected that the group has evaded tax of Rs 10 crore on the conversion of the stock-in-trade to capital as corresponding income has not been declared. The group has also not declared income amounting to Rs 45 crore on the benefits paid to retiring partners," it added.
As per the press release issued by the Ministry, the evidence has also been found and seized substantiating that the promoters of the group have incorporated some offshore entities. However, such offshore entities have not been reported in their respective Income Tax Returns.
"The evidence recovered during the search revealed that the offshore entities are run and managed by the Indian promotors. Two of such offshore entities have also been found to own one villa each in the UAE," it stated.
It has also been unearthed that one of the offshore entities of the group from the UAE has purportedly introduced illicit share capital of over Rs 16 crore in an Indian entity of the group, at an exorbitant premium, the press note read.
"This recipient group entity has also obtained the further sum of Rs 19 crore in the form of illicit share capital from certain Kolkata based shell entities. One of the shareholder directors of these shell entities admitted on oath that he was a dummy director and invested in the share capital of the group company at the instance of the promoters of the group," it added.
During the search operations on another UP-based group, incriminating evidence substantiating unrecorded cash transactions of about Rs 10 crore have been found and seized. It is also gathered that the group is not maintaining any stock register for its inventory.
So far, unaccounted cash exceeding Rs 9.40 crore and unexplained jewellery of more than Rs 2 crore have been seized and several bank lockers have been placed under restraint and are yet to be operated, the ministry further said.
Further investigation is underway.
( With inputs from ANI )
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