The Income Tax Department, in a recent appraisal report, had flagged several suspected irregularities on the part of the Nirav Modi group of companies.
The report, submitted last year, mentioned that the group accepted cash from customers for sale of jewellery and diamonds that were “over and above” the sale consideration as recorded in the account books. The Income Tax authorities had confronted Mr. Modi with their findings, but did not allegedly get a satisfactory explanation. During the check period, the agency found cash receipts of over ₹158 crore had been recorded.
Based on the document seizures during searches, the tax officials also found that a company had received ₹284 crore from two companies based in Cyprus and Mauritius between 2013-14, in the form of share capital and high share premium. The source of funds and “creditworthiness” of the overseas companies were not explained properly.
The subsequent probe revealed that the same company had received ₹271 crore from another Singapore-based firm. The department found a huge difference in stock valuation of the group’s SEZ units, allegedly over ₹1,216 crore, indicating “unaccounted sale” of imported diamonds.
