IT Department conducts search and seizure operations in Mumbai; Seized Unaccounted cash exceeding Rs.4 crore
The Income Tax Department initiated search and seizure operations in the case of a group, engaged in the manufacturing of wires and cables and other electrical items on 22.12.2023.
The search also included some of the group’s authorised distributors. The search operation took place at over 50 locations in Mumbai, Pune, Aurangabad, Nasik, Daman, Halol, and Delhi.
During the course of the search operation, a huge number of incriminating evidences in the form of documents and digital data have been found and seized. These evidences reveal modus-operandi of tax evasion used by the group in connivance with some of the authorised distributors. Preliminary analysis suggests that the flagship company indulged in unaccounted cash sales, cash payments for unaccounted purchases, non-genuine transport and sub-contracting expenses, etc for suppression of its taxable income.
Credible evidence discovered during the search revealed that the flagship company made unaccounted cash sales of around Rs. 1,000 crores that were not documented in the books of accounts. Evidence of unaccounted cash payments of more than Rs. 400 crore made by a distributor on behalf of the main firm to purchase raw ingredients has also been collected.
Furthermore, non-genuine expenses in the form of subcontracting, purchases, and transportation expenses, totalling around Rs. 100 crore, have been discovered in the confiscated evidence from the flagship company’s facilities.
The search action also revealed unexplained transactions by the distributor for producing invoices without a legitimate supply of products, despite the fact that such commodities were sold in cash on the open market. Thus, the approved distributor assisted certain parties in inflating their purchase accounts, which totalled around Rs. 500 crore. This distributor exclusively sells products from the flagship company.
During the search operation, unaccounted cash exceeding Rs. 4 crore was seized and more than 25 bank vaults were placed under lockdown.
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