In a major crackdown, the Income Tax Department on Wednesday (January 10) initiated search and seizure operations on a prominent Mumbai-based group engaged in the manufacturing of wires, cables, and other electrical items.
The operation, conducted on December 22, 2023, targeted not only the group's premises but also covered some authorised distributors associated with the group.
The extensive search, spanning over 50 locations in Mumbai, Pune, Aurangabad, Nasik, Daman, Halol, and Delhi, uncovered a significant cache of incriminating evidence in the form of documents and digital data. These findings exposed a complex tax evasion modus operandi orchestrated by the group in collaboration with certain authorised distributors.
Preliminary analysis suggests that the flagship company within the group engaged in various deceptive practices, including unaccounted cash sales, off-the-books cash payments for purchases, and fabrication of transport and sub-contracting expenses to suppress its taxable income.
The recovered evidence indicates that the flagship company conducted unaccounted cash sales amounting to approximately ₹1,000 crore, deliberately omitted from its official records.
Additionally, evidence of unaccounted cash payments exceeding ₹400 crore, made by a distributor on behalf of the flagship company for raw material purchases, has been seized.
The search operation brought to light non-genuine expenses, such as sub-contracting expenses, purchases, and transport expenses, totaling around Rs. 100 crore, identified from the seized evidence at the flagship company's premises.
Further revelations from the search operation unveiled unexplained transactions facilitated by an authorised distributor.
The distributor issued bills without genuine goods supply, allowing certain parties to inflate their purchase accounts, aggregating to approximately ₹500 crore. Notably, this distributor exclusively sells products manufactured by the flagship company.
