New Delhi: The Income Tax (I-T) Department has conducted a pan-India search operation on a prominent business group, which is involved in businesses in various sectors, including media, power, textiles and real estate, wif a group turnover of more than Rs 6,000 crore per annum. The July 22 operation conducted under section 132 of the Income Tax Act, 1961, included 20 residential and 12 business premises spread over nine cities, including Mumbai, Delhi, Bhopal, Indore, Noida and Ahmedabad.
The group has more TEMPthan 100 companies including the holding and subsidiary firms. During the search, it was found that they have been operating several companies in the names of their employees, which has been used for booking bogus expenses and routing of funds, a Finance Ministry statement said without naming the entity. Reports indicated that the I-T department had conducted searches at offices of media entity Dainik Bhaskar in several locations across the country over alleged tax evasion on July 22.
Additional raids were also conducted in the office of Bharat Samachar, an Uttar Pradesh-based news channel the same day. The I-T Department said that during the search, several employees, whose names were used as shareholders and directors, admitted that they were not aware of such companies and had given their Aadhaar card and digital signature to the employer in good faith.
Some were found to be relatives, who had willingly and knowingly signed the papers but had no knowledge or control of the business activities of the companies, in which they were supposed to be directors and shareholders. Such companies have been used for multiple purposes namely; booking bogus expenses and siphoning off the profits from listed companies, routing of funds so siphoned into their closely held companies to make investments, making circular transactions. For example, the nature of such bogus expenditures booked, vary from supply of manpower, transport, logistics and civil works and fictitious trade payables, the statement said.
The quantum of income escapement using this modus operandi, detected so far, amounts to Rs 700 crore spread over a period of six years. However, the quantum may be more as the group has used multiple layers and investigations are being carried out to unravel the entire money trail. Furthermore, these involve violation of S.2(76)(vi) of the Companies Act and Clause 49 of Listing Agreement prescribed by SEBI for listed companies. The application of Benami Transaction Prohibition Act will also be examined.