I-T Department raids Gujarat diamond group, claims multi-crore tax evasion

Documents seized pertain to unaccounted purchases and sales, bogus invoices, movement of cash through courier firms, use of unaccounted income for acquiring properties and stock in the past five years.

According to a CBDT statement, “unaccounted” cash and jewellery worth ₹1.95 crore were seized during the raids and “unaccounted” diamond stock worth ₹10.98 crore were detected. Image for representation.

The Income-Tax Department has conducted searches on the premises of a Gujarat-based leading diamond seller and exporter based on inputs about tax evasion.

Over the years, the group had accounted for sale of small diamonds worth about ₹2,742 crore in its books, against which a substantial part of purchases were made in cash, but the purchase bills were taken from accommodation entry providers, said the agency. It is also into tiles manufacturing.

The I-T Department searched 23 premises located in Surat, Navsari, Morbi and Wankaner in Gujarat and Mumbai in Maharashtra. The operation led to seizure of documents pertaining to unaccounted purchases and sales, bogus invoices, movement of cash and stock through “angadia (courier)” firms, use of unaccounted income for acquiring properties and stock in the past five years.

“...the assessee has made unaccounted purchase and sale of small polished diamonds of about ₹518 crore over the period...the assessee has sold more than ₹95 crore of diamond scrap in cash generated from its manufacturing activities, which remains unaccounted for and represents its income,” said the agency.

The I-T probe has revealed that the group made its major purchases of rough diamonds through imports and export sales of finished bigger diamonds via its company registered in Hong Kong, effectively controlled and managed from India. “The data reveals that the assessee has made purchases of ₹189 crore and sale of ₹1,040 crore in the last two years through this entity,” it said.

According to the agency, the complete financial transactions of real estate deals were found, which led to the detection of unaccounted income of ₹80 crore.

“Further, the sale transactions of shares pertaining to the business of tiles were examined, which led to the detection of ₹81 crore of unaccounted income,” it said.

During the searches, unaccounted cash and jewellery of ₹1.95 crore were seized, and unaccounted diamond stock of 8,900 carat worth ₹10.98 crore was detected. Several lockers belonging to the group have also been identified.