Government of India
Department of Revenue
Ministry of Finance
Central Board of Direct Taxes

New Delhi, 15th December, 2020

PRESS RELEASE

Income Tax Department conducts searches in Tamil Nadu

The Income Tax Department carried out search and seizure operations on 09.12.2020 on premises of a leading business group operating from Chennai, based on intelligence input about tax evasion. The searches covered 60 premises located in Chennai, Trichy, Coimbatore, various places in Andhra Pradesh, Karnataka and Mumbai. The business activities include cement manufacturing, logistics, construction, among others.

The highlight of the search includes seizure of unaccounted cash of Rs. 23 crore from various locations. Foreign assets to the extent of Rs.110 crore in the form of Fixed Deposits have been found during the search, which were not disclosed in the return, and will attract action under the Black Money Act. Inflation of expenditure to take out cash and also to reduce profits, receipts not accounted fully, bogus claim of depreciation etc. amounting to Rs. 435 crore were also identified. There are indications of capitation fee receipts for medical admissions to post-graduate programmes.

During the search, details of the actual financial transaction between the searched group and another group for the sale of three infrastructure facilities at various ports were found. Complex financial arrangements creating bogus liabilities from their own concerns were also seen to be made, ostensibly, to reduce the capital gains arising out of this transfer. Capital gains amounting to approximately Rs. 280 crore have been arrived at. Similarly, huge capital introduction through a web of bogus inter corporate transactions within the group is also under the scanner.

A large number of lockers belonging to the group have been identified, which will be operated in due course. As of now, the Department has succeeded in detecting evasion of income of over Rs. 700 crore.

The search is temporarily concluded and investigations are still in progress.

(Surabhi Ahluwalia)
Commissioner of Income Tax
(Media & Technical Policy)
Official Spokesperson, CBDT

Government of India
Department of Revenue
Ministry of Finance
Central Board of Direct Taxes

New Delhi, 16th December, 2020

PRESS RELEASE

Income Tax Department conducts searches in Chandigarh

The Income Tax Department carried out search and seizure operations on 13.12.2020 in the case of a Chandigarh based listed pharmaceutical company and its associated concerns. A total of 11 premises were covered spanning Chandigarh, Delhi
and Mumbai.

The primary allegation against the group was that the assessee company had purchased 117 acres of Benami land in Indore, in the name of a conduit company. During the search, ample evidence has been found and seized which clearly establishes that the Benami company is a conduit of the pharmaceutical company with no real business activity. All the dummy directors and shareholders of the Benami company have also admitted in their respective statements that the company was a shell company with no real business activity and the land in Indore had been bought from the funds of the listed company for the benefit of the Managing Director.

The company was in the process of selling off this Benami land. Hot pursuit enquiries were conducted and an “agreement to sell” of the Benami land containing cash receipt of Rs. 6 crore was also found from the possession of the prospective buyers. The buyers have admitted in their statements that the deal was negotiated by the Managing Director and the agreement for the sale of the Benami land was signed in the office of the Managing Director. The buyers have also admitted that they had given unaccounted cash amounting to Rs. 6 crore on various dates through one hawala operator. The hawala operator in his statement, has also given a detailed modus operandi of cash transfer along with the exact dates and amounts of handing over of the cash by him in the office of the listed company.

Investigations have also proved that the Managing Director has claimed wrongful interest expense of Rs. 2.33 crore under Section 23 of the Income-tax Act, 1961 by showing his self-occupied property as a rented property to his sons. Cash amounting to Rs. 4.29 crore and jewellery amounting to Rs. 2.21 crore have been seized so far. 3 lockers have been put under restraint.

Further investigations regarding the holding of Benami shares worth Rs. 140 crore by the HUF of the Managing Director and bogus purchases of substantial amounts are in progress.

(Surabhi Ahluwalia)
Commissioner of Income Tax
(Media & Technical Policy)
Official Spokesperson, CBDT

Government of India
Department of Revenue
Ministry of Finance
Central Board of Direct Taxes

New Delhi, 15th December, 2020

PRESS RELEASE

Income Tax Department conducts searches in Pune Region The Income Tax Department carried out search and survey action on 10.12.2020 in the cases of leading builders and entry operators in the Panvel region of Pune. The search and survey actions were carried out at 29 locations in Panvel and Vashi.

The search action on the group resulted in unearthing of incriminating data pertaining to routing of unaccounted income earned by way of on-money from flat and land sale from real estate projects of the group, in the form of accommodation entries of non-genuine unsecured loans through certain shell companies. Such accommodation entry of unsecured loans including interest paid of Rs. 58 crore in the books of accounts of the group was detected during the course of search and survey action. Details of non-genuine subcontract expenses of Rs. 10 crore were also detected alongwith unaccounted expenses of Rs. 5 crore in purchase of land.

Further, from the group covered under survey, incriminating evidence of Rs. 59 crore of undisclosed interest income earned against the loan amount paid by the group disguised as advances against land was found and impounded. From the action on entry operators, evidences related to cash investment of Rs. 5 crore in the purchase of land as well as accommodation entry of about Rs. 11 crore provided to various beneficiaries has been unearthed. The data pertaining to entry operators is still being analysed.

Moreover, unexplained / unaccounted cash of approximately Rs. 13.93 crore has also been found and seized during the search action by the Department. Hence, total unaccounted income of the group, detected, so far, is Rs. 163 crore, including the cash seized during the search and survey action. Further, more evidences related to out-of-books transactions by taking on-money on the sale of flats and land have been seized.

Further investigations are in progress.

(Surabhi Ahluwalia)
Commissioner of Income Tax
(Media & Technical Policy)
Official Spokesperson, CBDT

Government of India
Department of Revenue
Ministry of Finance
Central Board of Direct Taxes

New Delhi, 29th November, 2020

PRESS RELEASE

Income Tax Department conducts searches in Tamil Nadu

The Income Tax Department conducted searches on 27/11/2020 in the case of an IT SEZ developer, its ex-Director and a prominent stainless-steel supplier in Chennai. The search operation was carried out at 16 premises located in Chennai, Mumbai, Hyderabad and Cuddalore.

The evidences unearthed include unaccounted assets worth about Rs. 100 crore accumulated by the ex-Director and his family members in the past 3 years. The search further unearthed that the IT SEZ developer claimed bogus work-in-progress expenses of about Rs. 160 crore in an under-construction project. The entity had also claimed capital expenses of around Rs. 30 crore on account of bogus consultancy fees in an operational project and inadmissible interest expenses to the extent of Rs. 20 crore was also claimed by the entity.

The search further revealed certain share purchase transactions relating to the IT SEZ developer. The shares of this entity were sold by its erstwhile shareholders, a resident and a non-resident entity, which routed its investment through a Mauritius intermediary, for about Rs. 2300 crore in FY 2017-18 but capital gains out of this sale transaction were not disclosed to the department.

Investigation is in progress to determine the undisclosed capital gains in the hands of both the shareholders. Other land transactions involving cash payments and an issue relating to Compulsory Convertible Debentures are also under examination.

The evidences found in the premises of the Stainless-steel supplier revealed that the supplier group has been conducting three sets of sales: accounted; unaccounted and partly-accounted. The unaccounted and partly-accounted sales amount to more than 25% of the total sales each year. Further, the assessee group has provided sales accommodation bills to various customers and received commission of more than 10% on these transactions. While the quantification of unaccounted income is being carried out currently, it is estimated to be around Rs. 100 crore. 

The related concerns of the assessee group are involved in financing, money lending and real estate development. The unaccounted transactions conducted by these entities and the unaccounted capital/loan infusion in these entities are estimated to be around Rs.50 crore. The searches, so far, have resulted in the detection of undisclosed income of more than Rs. 450 crore.

Further investigations are in progress.

(Surabhi Ahluwalia)
Commissioner of Income Tax
(Media & Technical Policy)
Official Spokesperson, CBDT

Government of India
Department of Revenue
Ministry of Finance
Central Board of Direct Taxes

New Delhi, 26th November, 2020

PRESS RELEASE

CBDT to validate Unique Document Identification Number (UDIN) generated from ICAI portal at the time of upload of Tax Audit Reports

The Institute of Chartered Accountants of India, in its gazette notification dated 2 nd August, 2019, had made generation of UDIN from ICAI website www.icai.org mandatory for every kind of certificate/tax audit report and other attests made by their
members as required by various regulators. This was introduced to curb fake certifications by non-CAs misrepresenting themselves as Chartered Accountants. 

In line with the ongoing initiatives of the Income Tax Department for integrating with other Government agencies and bodies, Income-tax e-filing portal has completed its integration with the Institute of Chartered Accountants of India (ICAI) portal for
validation of Unique Document Identification Number (UDIN) generated from ICAI portal by the Chartered Accountants for documents certified/attested by them.

It may be noted that, in consonance with the above requirement, Income-tax e-filing portal had already factored mandatory quoting of UDIN with effect from 27 th April, 2020 for documents certified/attested in compliance with the Income-tax Act,1961 by a Chartered Accountant. With this system level integration, UDIN provided for the audit reports/certificates submitted by the Chartered Accountants in the e-filing portal shall be validated online with the ICAI. This will help in weeding out fake or incorrect Tax Audit Reports not duly authenticated with the ICAI.

If for any reason, a Chartered Accountant was not able to generate UDIN before submission of audit report/certificate, the Income-tax e-filing portal permits such submission, subject to the Chartered Accountant updating the UDIN generated for the
form within 15 calendar days from the date of form submission in the Income- tax e-filing portal. If the UDIN for the audit report/certificate is not updated within the 15 days provided for the same, such audit report/certificate uploaded shall be treated as invalid submission.

(Surabhi Ahluwalia)
Commissioner of Income Tax
(Media & Technical Policy)
Official Spokesperson, CBDT