Borrowing money

The Income Tax Department conducts research on major corporations in Rajasthan, Maharashtra

The Income Tax Department carried out a search operation in various locations in Maharashtra and Rajasthan. The department has conducted research on two major groups engaged in the manufacture of steel TMT bars spread over Jalna, Aurangabad, Nashik and Mumbai. While an investigation has taken place in a Jaipur-based group engaged in the trade of gemstones and jewellery, hospitality and real estate.

Both search operations were conducted on August 3, 2022, in both states. Investigations are ongoing.

Maharashtra:

In Maharashtra, the IT department researched two major groups engaged in the manufacture of TMT steel bars. The operations covered over 30 premises and were spread over Jalna, Aurangabad, Nashik and Mumbai. During the investigation, the department found and seized several inculpatory evidence.

According to evidence seized from both groups, it was revealed that they engaged in large-scale tax evasion, resorting to expense inflation through fictitious purchases from multiple entities.

These entities have also been found to be involved in GST fraud. Evidence was also found of an excess stock of raw materials, not recorded in the books of accounts, exceeding 120 crore, according to the statement from the Ministry of Finance.

Furthermore, evidence in one of the groups showed that he had indulged in layering his unaccounted-for income through bogus unsecured loans and share premiums, obtained from shell companies based in Kolkata.

In addition, the department found a large number of lockers of the two groups, opened in the name of employees of the companies, which were maintained with a cooperative bank.

FinMin’s statement added that during the search operation, more than 30 bank lockers, including several Co-operative Bank lockers, were searched. Huge unaccounted cash and gold jewelry was found and seized from these lockers.

The department also seized a large sum of unaccounted-for cash from a secret room on the farm belonging to one of the groups.

So far, the department has seized unaccounted cash of Rs.56 crore, as well as bullion and jewelry worth 14 crore.

Rajasthan:

A group, engaged in the trade of gems and jewelry, hotels and real estate, fell under the radar of the IT department, following which a search operation took place covering more than three dozen of premises located in Jaipur and Kota. The department found and seized a large amount of incriminating documentary and digital evidence.

FinMin said analysis of evidence seized from real estate activity reveals that the group engaged in large-scale tax evasion by accepting cash when selling residential homes and land that were not was not recorded in the regular Account books. In addition, evidence relating to the off-book sale of gemstones and jewelry was also discovered during the search.

Further, the analysis revealed that the unrecognized income thus earned was invested in land, construction of a luxury hotel and was also used to finance cash loans.

The evidence seized contains details of interest income earned on these cash loans which were not recorded in the books of account, he added.

As part of the investigation, the group is found to have engaged in the generation of unrecognized revenue exceeding 150 crore. So far, the search operation has resulted in the seizure of unrecorded assets worth more than 11 crores.

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