₹1,000 cr. unaccounted for income detected

The Income Tax (I-T) Department has discovered ₹1,000 crore unaccounted for income throughout a search operation it performed earlier this week on a Chennai-based info expertise infrastructure group.

The searches have been performed at 5 areas in Chennai and Madurai.

“The search led to the detection of around ₹1,000 crore unaccounted for income, out of which, disclosure of an additional income of ₹337 crore has already been made by the assessee, besides actionable issues under Benami and Black Money Acts. Further investigations are on,” an I-T Department launch stated.

Singapore join

The search led to the unearthing of proof referring to investments in a Singapore-registered firm.

Its shares are held by two companies — one owned by the group searched, whereas the opposite is a subsidiary of a serious infrastructure growth and financing group.

“It has been found that the company belonging to the searched group has invested a very nominal amount, although it has a 72% shareholding, while the other company, having 28% shareholding, has almost invested the entire money. This has resulted in a benefit/gain of almost Singapore $7 crore, that is, around ₹200 crore in the hands of the company belonging to the searched group. This was not disclosed by it in its return of income and in the FA schedule,” the press launch stated.

Thus, there was suppression of international income acquired within the type of share subscription, equal to ₹200 crore (current worth ₹354 crore), which is taxable in India, within the fingers of the shareholder.

Proceedings shall be initiated underneath the Black Money Act, 2015, for not disclosing international belongings/useful curiosity within the FA Schedule of the income tax return.

Shell corporations

During the searches, it was additionally discovered that the group just lately acquired 5 shell corporations to siphon out ₹337 crore from the primary firm, by elevating bogus payments, with out doing any actual enterprise in these companies.

The siphoned cash was transferred overseas and utilised for the acquisition of shares, within the identify of the son of the primary assessee, the division’s press launch added.

“One of the directors has admitted that they diverted funds through these companies. Evidence has also been found regarding the allotment of preference shares worth ₹150 crore, in 2009, in the group company, by passing accounting entries, only to project inflated capital before banks and financial institutions to obtain finances. Allotment of another ₹150 crore-worth preference shares in 2015, from funds from group companies, who in turn took loans/entries, is being examined,” the discharge stated.

The group borrowed funds from banks, on curiosity, and diverted it to different group corporations, freed from curiosity, for investments in properties.

The complete curiosity disallowance on this depend works out to round ₹423 crore.

Further, the search additionally revealed that the group bought about 800 acres of land, price a minimum of ₹500 crore, within the names of shell corporations, from funds supplied by the primary group.