In 5 years, black money detection up 15.5 times

Undisclosed income detected during each survey has shot up drastically in two years

Updated - November 17, 2021 05:10 am IST

Published - February 13, 2016 12:09 am IST - Mumbai:

The nationwide crackdown on black money has meant a steady increase in detection of undisclosed income.

The nationwide crackdown on black money has meant a steady increase in detection of undisclosed income.

The nationwide crackdown on black money has meant a steady increase in detection of undisclosed income, which has jumped 15.5 times over the past five years.

A comprehensive report of the Director General of Income Tax (Intelligence and Criminal Investigation) accessed by The Hindu shows more and more prominent business houses, including diamond traders, steel magnates and the country’s leading pharma companies coming under the taxmen’s scanner. National undisclosed income jumped from just Rs. 5,894 crore in financial year 2011 to Rs. 90,391 crore in 2014. The undisclosed income detected in 2012 was Rs. 6,573 crore and Rs. 19,337 crore in 2013.

The data for 2015 has not been fully collated but the number stood at Rs. 1,900 crore in the first couple of months of the financial year, tax officials said.

More and more companies are involved in making bogus entries in their accounts. Under this jamakharchi or ‘accommodation entry business’, paper entries are made in account books to facilitate cash movement.

The IT officials compiled data containing 38,586 records and found that 19,349 of them pertaining to 3,500 parties were bogus accommodation entries on ‘purchases’ made during this period. The sale volume for these entries was Rs. 25,000 crore in the past five years, the report reveals.

The undisclosed income detected during each survey, too, shot up drastically during this period. From Rs. 1.51 crore detected in 2010 to Rs. 4.18 crore detected per survey in 2012, it increased to Rs. 16.96 crore in 2014. During this period, a total of 9,957 surveys were carried out by the DGIT (Investigation) across the country, while 2,167 groups were searched with assets worth Rs. 3,100 crore seized by tax sleuths.

The data was collected from 18 field formations of the DGIT (Inv) and DGIT (I&CI) located in Mumbai, Delhi, Chennai, Ahmedabad, Chandigarh, Jaipur, Kolkata, Lucknow, Nagpur, Bangalore, Bhubaneswar, Bhopal, Guwahati, Hyderabad, Kochi, Kanpur, Pune and Patna.

Most of the action was taken through direct enquiry regarding investment and expenditure under Section 131, surveys under Section 133A and searches under Section 132 of the Income Tax Act.

Among key cases in 2014, the DGIT found that a leading developer accepted Rs. 25,000 crore from the public to develop land on their behalf but recorded false development expense of Rs. 11,000 crore in the books over six years. Nearly 99 builders who had a sub-contract of Rs. 300 crore each with this developer did not carry out the land development. The IT sleuths later traced Rs. 3,700 crore of land development expenses to an entry operator in Kolkata.

In another case the same year, it was found that 70 benami importers imported diamonds from Europe with a credit period of six to 24 months. The consignment was later handed over to real importers by them without recording sales in the books. The same year, action on a prominent pharma company revealed strong evidence of huge payments for non-business purposes. But the claims were in violation of 80(IC) of the Act. It later resulted in admission of undisclosed income of Rs. 532 crore.

“The prior requirement for a search is credible evidence, substantial concealment and direction from other agencies,” said a source.

Officials said that a survey on a major steel company revealed that the statutory condition for a threshold of 20 per cent with regard to previously used plant and machinery for claiming exemption under Section 10B was violated. “We later withdrew its exemption of Rs. 431 crore,” said an official.

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