Two operations were carried out against the leading conglomerate engaged in manufacturing of steel products and business house in textile and filament yarn
The Income Tax Department has detected financial irregularities of over ₹1,000 crore in two separate acts done against a prominent conglomerate engaged in manufacturing of steel products and a trading house in textile and filament yarn. Searches were conducted in West Bengal, Delhi and Punjab.
In the first case, on September 17, the department launched search and seizure exercise at 25 locations in Kolkata, Durgapur, Asansol and Purulia and other places in West Bengal, linked to a company dealing in steel products.
unaccounted income
It detected unaccounted income by the group through cash sales and expenditure, purchases from bogus parties, under-reporting of actual production and cash purchases of scrap, besides land purchases and sales. This proceeds were used in the form of unsecured loans and the sale of shares of shell entities through the layering of funds.
“A large number of property documents belonging to one of the group members showing land and property under different names have also been seized. The total amount of such incriminating evidence relating to the construction group is over ₹700 crore,” the department said, adding that ₹20 lakh in cash was seized during searches. Two lockers were found.
A search was also conducted against a “housing entry” provider who helped accused persons to fake financial transactions worth several hundreds of crores of rupees through sale of shares of shell companies, unsecured loans from such entities and bogus billing. Of.
“Evidence of over 200 bank accounts of more than 200 companies/entities being managed from the premises of the entry operator…” said the department.
housing entries
On 18 September another search and seizure operation was conducted on business houses in Delhi, Punjab and Kolkata and the department found evidence of residence entries. “The group has maintained unaccounted funds of about ₹350 crore in its overseas bank accounts and has remitted these funds back to its business through shell entities in tax havens,” the department said.
NS modus operandi Investments issued by its main concern, by foreign entities, under the control of the group, in foreign currency convertible bonds, and subsequently – under the guise of default on payments – converting it into company shares.
Management fees were being paid to foreign companies and trusts for managing the unaccounted funds. The group did not disclose to the authorities the foreign assets and bank accounts required under the law.
“Evidence has been gathered that cash of about Rs 100 crore was generated from fraudulent expenditure in the accounts of the company and cash transactions in land deals,” the department disclosed.
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