Fictitious transactions racket of Rs. 290.70 crore busted by DGGI, Nagpur

Mumbai, December 8, 2020

A fictitious transactions racket of Rs 290.70 crore was busted by the Directorate General of GST Intelligence (DGGI), Nagpur, an official press release said on Monday.

As a follow-up of the detection of a non-existent advertising firm in Dhule which had availed and passed on fake ITC, searches were conducted at the premises of a Mumbai-based private limited company, M& M Advisors & Consultants Private Limited and at the residences of its director and chartered accountants, it said.

This company was registered for licensing services for the right to broadcast and show movies. The searches uncovered a number of documents, the examination of which revealed that the company was engaged in licensing of movie rights of film production houses for broadcasting on national and international channels. The company had declared itself to be the sole rights holder of movies produced by big production houses, the release said.

It was purchasing the rights of the movies produced by the top banners and was transferring these rights under the contract system to Rights Assignors, who were availing Input Tax Credit.

Preliminary scrutiny of the documents revealed that this company had undertaken fraudulent transactions of Rs 290.70 crore and had passed on fake Input Tax Credit of Rs 25.22 crore to Rights Assignors, the ultimate beneficiaries, the release said.

During investigations, the Rights Assignors paid the entire Input Tax Credit of Rs 25,22,62,786 in cash, which was the Input tax credit passed on by this company.

The director of the company, Pradeep Ashok Malankar, who on inquiries with the Ministry of Corporate Affairs was found to be the director of three more companies, was arrested on December 5 and remanded to judicial custody by a court till December 18, the release added.

NNN