A search conducted by Income Tax officials on offices and residences of employees of an infrastructure development company, which also dealt with medical equipment business, has resulted in the recovery of incriminating documents, ₹1.7 crore cash and details of undisclosed foreign bank accounts. The search was conducted on Wednesday.
According to sources, one of the group entities of the company was in the field of infrastructure development, building flyovers, bridges and railway infrastructure. The search was carried out based on specific information regarding faulty evaluation of the fair market value of shares in order to raise capital, undisclosed foreign assets and inflation of expenses.
Documents seized
Evidences relating to transfer of equity shares of foreign and domestic companies held by the investment companies of the promoters of the group were also seized, according to sources.
Further investigations revealed that the group entities were claiming expenses relating to capital assets as revenue expenses and charged to profit and loss account resulting in carry-forward losses.
One of the entities of the company dealing with dental equipment manufacturing group was found to have inflated expenses under the head conveyance, sales promotion and commission expenses.
The infrastructure development company covered in the operation was found to be involved in inflation of expenses through cash vouchers under the head labour and wages.
“The cash expenses were incurred for expenses that could not qualify as genuine business expenses,” said the sources.
The entire modus operandi was recorded based on the deposition given by the employees of the company and relevant evidences were seized, sources said.
Inflation of expenses
The operation resulted in admission of unaccounted income through inflation of expenses to the extent of ₹33.48 crore by the dental equipment manufacturing group and infrastructure development company.
Further investment entities of the promotors of the medical equipment manufacturing group admitted income of ₹71.39 crore consequent to transfer of shares held in foreign and domestic companies.
₹174.7 crore
Verification and analysis of documents related to the company revealed that there were discrepancies to the tune of ₹174.7 crore relating to valuation of shares at a premium, wrong claim of expenses under revenue expenses which were actually utilised for acquiring capital assets, excess claim of depreciation, failure to deduct TDS, wrong claim of expenses under the miscellaneous head.
