The Income Tax department on Tuesday informed the Madras High Court that the total unaccounted income of private firms run by government civil supplies contractor T.S. Kumarasamy of Christy Friedgram Industry of Namakkal runs into ₹2,056.76 crore, for which he was liable to pay tax of approximately ₹700 crore, excluding interest.
Justices V. Parthiban and Anita Sumanth were informed by A.P. Srinivas and A.N.R. Jaya Prathap, standing counsel for Income Tax department, that the law did not permit waiver of penalty, immunity from prosecution and stay on recovery proceedings just because the contractor was willing to pay ₹50 crore even before completion of assessment proceedings.
The counsel turned down an offer made by the contractor to pay ₹50 crore forthwith if no coercive action was taken against him and he was allowed to continue his business peacefully. They also submitted a detailed counter affidavit filed by Mangapathy Vivekananda, Deputy Commissioner of Income Tax, rejecting the offer made by the contractor.
The counter stated that a massive search conducted at various premises belonging to the contractor over five days in July 2018 had led to a recovery of unaccounted cash of ₹15 crore from bank lockers held in the name of three of his employees. Books of accounts, sale deeds and various other documents were also seized during the raids.
Apart from all these, 153 electronic devices including 55 compact discs, 31 hard disks, 37 pen drives, 15 laptops and 15 smart phones were recovered by the I-T sleuths. The Deputy Commissioner also gave a detailed breakup of the unaccounted income of ₹1,351.84 crore, reportedly admitted by the group of companies run by the contractor.
The officer said ₹751 crore of unaccounted income had been admitted by Christy Friedgram Industry, ₹270 crore by Natural Food Products, ₹183 crore by Suvarnabhoomi Enterprises Limited and ₹147 crore by Rasi Nutri Foods. Further, an additional income of Rs.17.66 crore was detected during post search proceedings.
That was not all as the I-T department found out unexplained cash expenses to the tune of ₹687.25 crore from the financial year 2011-12 and all this worked out to a total unaccounted income of ₹2,056.76 crore, Mr. Vivekananda added. He stoutly denied the claim of the petitioner struggling to do business because of the pending proceedings.
Though a huge amount of money to be received by the petitioner from the government towards the materials supplied by him was attached by the I-T department, a substantial amount was already released based on court order and at present only ₹213 crore was available in the High Court branch of Indian Bank as per court orders.
Since the ₹213 crore would work out to only a fraction of the tax proposed to be collected, the entire amount should be fully appropriated to protect the interests of the revenue, the officer said.
After perusing his counter affidavit, the judges adjourned all writ petitions filed by the contractor to Monday for hearing the cases on merits.
