The Income Tax (I-T) Department has detected undisclosed income to the tune of over ₹450 crore from a search recently. On Friday, the taxmen conducted searches in the case of an IT SEZ developer, its ex-director and a prominent stainless-steel supplier in Chennai. The searches were carried out on 16 premises in Chennai, Cuddalore, Mumbai and Hyderabad. Details provided by the I-T Department showed that evidence unearthed included unaccounted assets worth about ₹100 crore, accumulated by the ex-director and his family members, in three years.
The search further showed that the IT SEZ developer claimed bogus work-in-progress expenses of about ₹160 crore, in a project under construction. The entity also claimed capital expenses of around ₹30 crore, on account of bogus consultancy fees, in an operational project, and inadmissible interest expenses to the extent of ₹20 crore. Further analysis revealed certain share purchase transactions relating to the IT SEZ developer. Shares of the entity were sold by its erstwhile shareholders, a resident and a non-resident entity, which routed its investment through a Mauritius intermediary, for about ₹2,300 crore, in financial year 2017-18. But capital gains out of this sale transaction were not disclosed to the Department.
A statement by the I-T Department said further investigation was in progress to determine undisclosed capital gains with both shareholders. Other land transactions involving cash payments and an issue relating to compulsory convertible debentures are also under examination.
Evidence found on the premises of the stainless steel supplier revealed that the group had been conducting three sets of sales — accounted, unaccounted and partly accounted. Unaccounted and partly-accounted sales amounted to more than 25% of total sales each year. Further, the assessee group provided sales accommodation bills to various customers and received commission of more than 10% on these transactions. While the quantification of unaccounted for income is being carried out currently, it is estimated to be around ₹100 crore. Related concerns of the assessee group are involved in financing, money lending and real estate development. Unaccounted transactions conducted by the entities and the unaccounted capital/loan infusion in these entities are estimated to be around ₹50 crore.
