The income tax department has searched five locations in Chennai and Madurai for a Chennai-based group operating in the IT infrastructure sector and has discovered unaccounted for cash of around ₹Rs 1 billion, according to a press release issued on Saturday.
The search conducted on Nov. 6 led to the discovery of evidence related to investments in a Singapore-registered company, according to a statement issued by the Central Board of Direct Taxes.
“The shareholding of this company is in the hands of two companies, one owned by the sought group, while the other is a subsidiary of an important infrastructure development and financing group. It has been verified that the company belonging to the sought group has invested amount nominal although it has a 72 percent stake, while the other company that has a 28 percent stake has invested almost all of the money, “the statement added.
The CBDT also said that this has resulted in a profit of almost 7 crore Singapore dollars, which is around ₹200 million rupees, held by the company belonging to the wanted group, which was not disclosed by her in her income statement and also in the FA Program.
“Therefore, there is a suppression of foreign income received in the form of subscription of shares equivalent to ₹200 crore, which is taxable in India in the hands of the shareholder. Additionally, proceedings will be initiated under the 2015 Black Money Act for failing to disclose foreign assets / beneficial interest in Schedule FA of the income tax return, “according to the statement.
The group acquired 5 shell companies
He said the present value of this investment exceeds ₹354 crore. During the search, officials said it was also discovered that the group had recently acquired five shell companies, which were used to divert as much as ₹337 million rupees from the main group company by increasing false invoices and without doing any real business in these companies.
“The diverted money was transferred abroad and used to purchase shares in the name of the son of the main appraiser. One of the directors admitted to having diverted funds through these companies,” the statement read.
“Evidence has also been found regarding the allocation of preferred shares by value ₹Rs 150 million in 2009 in the group company by passing only accounting entries, to project inflated capital to banks and financial institutions to obtain finance. Assignment of another ₹Preferred shares worth Rs 150 million in 2015 from group companies funds are being examined, which in turn took out loans / tickets, “he added.
During the search, the CBDT said the group was found to have borrowed funds from interest-bearing banks and diverted them to other interest-free group companies for property investments. The total disallowance of interest on this count is approximately ₹423 million rupees, it said.
He said the search also revealed that the group had purchased about 800 acres of land worth at least ₹Rs 500 million, on behalf of various shell companies of the funds provided by the group’s main concern, adding that the applicability of the Benami Property Transaction Ban Act of 1988 to these transactions is under review.
“It was also seen that there was a transfer of substantial holdings during the current year at a price much lower than the fair market value to be determined under the 1962 IT Rules. In light of this, additions are likely to be made. under section 56 (2) (x) of the TI Act of 1961 (the Act) in the case of the buyer and capital gains under section 50CA of the Act, in the hands of the seller, “the statement said.
The CBDT said the search has led to the detection of unaccounted income from around ₹1000 crore, of which the disclosure of additional income of ₹The appraiser has already obtained Rs 337 million, in addition to issues actionable under the Benami and Black Money laws.
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