The Income Tax department has conducted searches against a Chennai-based IT infrastructure group and detected Rs 1,000 crore alleged black money and possible instances of holding of benami assets, the Central Board of Direct Taxes (CBDT) said on Saturday.
It said the raids were carried out on November 4 at five locations in Chennai and Madurai in Tamil Nadu.
"The searches had led to the detection of unaccounted income of around Rs 1,000 crore out of which disclosure of additional income of Rs 337 crore has already been made by the assessee, besides actionable issues under the Benami and Black Money Acts," the board said in a statement.
The CBDT is the administrative authority for the Income Tax department.
The raids led to "unearthing" of evidence relating to investments in a Singapore registered company, it said.
"The shareholding of this company is held by two companies, one owned by the group searched while the other company is a subsidiary of a major infrastructure development and financing group," the CBDT said.
"It has been found that the company belonging to the searched group has invested a very nominal amount, although it has 72 per cent shareholding, while the other company having 28 per cent shareholding only has invested almost the entire money," it said.
This has resulted into a "benefit or gain" of almost seven crore Singapore Dollars, which is about Rs 200 crore, in the hands of the company of the searched group. This was not disclosed by it in its return of income and also in the foreign assets schedule, the CBDT alleged.
"Thus, there is suppression of foreign income received in the form of share subscription equivalent to Rs 200 crore, which is taxable in India in the hands of the shareholder," it said.
The statement said that action "will be initiated" against the group under the Black Money Act, 2015, for not disclosing foreign assets and beneficial interest in the I-T return.
It added that the present value of this investment exceeds Rs 354 crore.
Raids found that the group had "acquired five shell (dummy) companies recently, which were used to siphon off as much as Rs 337 crore from the main group company by raising bogus bills and without doing any real business in these companies," it said.
"The siphoned off money was transferred abroad and utilised for purchase of shares in the name of the son of the main assessee," the CBDT alleged.
One of the directors, it said, has admitted that they have "diverted" funds through these companies.
"Evidence has also been found regarding allotment of preference shares worth Rs 150 crore in 2009 in the group company by passing accounting entries only to project inflated capital before banks and financial institutions to obtain finances," the board said.
"Allotment of another Rs 150 crore worth preference shares in 2015 from funds from group companies, who in turn took loans/entries, is being examined," it said.
The CBDT claimed that the group had borrowed funds from banks on interest and diverted to other group companies free of interest for investments in properties.
"The total interest disallowance on this count works out to about Rs 423 crore," the CBDT said.
The search revealed that the group had purchased about 800 acres of land worth at least Rs 500 crore in the names of various shell companies from the funds provided by the main group concern," it said, adding that this instance could be probed under the anti-benami assets law.
"It was also seen that there was transfer of substantial share holdings during the current year at a price much lower than the fair market value to be determined as per IT Rules, 1962," the board said.
"In view of this, substantial additions are likely to be made...in the case of the buyer and capital gains under section 50CA of the Act, in the hands of the seller. The quantum of this will be determined in due course," the CBDT said.