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Income Tax officials conduct searches in TN, find unaccounted income of more than Rs 450 crore
New Delhi, November 30, 2020
The Income Tax Department conducted searched last Friday on the premises of an IT SEZ developer, its former Director and a prominent stainless steel supplier based in Chennai and unearthed unaccounted income of more than Rs 450 crore.
The searches were carried out at 16 premises in Chennai, Mumbai, Hyderabad and Cuddalore, an official press release said.
"The evidences unearthed include unaccounted assets worth about Rs. 100 crore accumulated by the ex-Director and his family members in the past three years. The search further unearthed that the IT SEZ developer claimed bogus work-in-progress expenses of about Rs. 160 crore in an under-construction project. The entity had also claimed capital expenses of around Rs. 30 crore on account of bogus consultancy fees in an operational project and inadmissible interest expenses to the extent of Rs. 20 crore was also claimed by the entity," the release said.
According to it, the search further revealed certain share purchase transactions relating to the IT SEZ developer.
"The shares of this entity were sold by its erstwhile shareholders, a resident and a non-resident entity, which routed its investment through a Mauritius intermediary, for about Rs. 2,300 crore in FY 2017-18 but capital gains out of this sale transaction were not disclosed to the department.
"Investigation is in progress to determine the undisclosed capital gains in the hands of both the shareholders. Other land transactions involving cash payments and an issue relating to Compulsory Convertible Debentures are also under examination," the release said.
The release said the evidences found in the premises of the stainless steel supplier revealed that the group had been conducting three sets of sales: accounted; unaccounted and partly-accounted.
"The unaccounted and partly-accounted sales amount to more than 25% of the total sales each year. Further, the assessee group has provided sales accommodation bills to various customers and received commission of more than 10% on these transactions. While the quantification of unaccounted income is being carried out currently, it is estimated to be around Rs. 100 crore. The related concerns of the assessee group are involved in financing, money lending and real estate development. The unaccounted transactions conducted by these entities and the unaccounted capital/loan infusion in these entities are estimated to be around Rs. 50 crore," it said.
"The searches, so far, have resulted in the detection of undisclosed income of more than Rs. 450 crore. Further investigations are in progress," the release added.