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Here's how this profitable unicorn found itself in the income tax net

Here's how this profitable unicorn found itself in the income tax net

The IT department, without naming the start-up, stated that a Pune and Thane-headquartered unicorn, which has a pan India presence and a turnover of Rs 6,000 crore, in whose premises search operations were conducted.

Construction material sourcing startup Infra.Market has been alleged to be involved in tax evasion , according to the Income Tax department Construction material sourcing startup Infra.Market has been alleged to be involved in tax evasion , according to the Income Tax department

Construction material and equipments e-commerce unicorn Infra.market, which is a rare profitable start-up, has found itself in tax net after the Income Tax department on Sunday issued a statement saying that the company made huge unaccounted for cash expenditure and obtained accommodation entries, amounting to over Rs 400 crore. The IT department, without naming the start-up, stated that a Pune and Thane-headquartered unicorn, which has a pan India presence and a turnover of Rs 6,000 crore, in whose premises search operations were conducted.

The IT department further said that a total of 23 offices of the company were raided across the country in search operations. “A large number of incriminating evidence in the form of hard copy documents and digital data have been found and seized during the search operations. These evidences revealed that the group has booked bogus purchases, made huge unaccounted cash expenditures and obtained accommodative entries aggregating to over Rs 400 crore. These evidences were confronted to the Directors of the Group, who admitted under oath this modus operandi, disclosed additional income of more than Rs 224 crore in various assessment years, and consequently, offered to pay their due tax liability,” the IT department said in a statement.

Furthermore, the investigations revealed that Infra.market had obtained huge foreign funding via the Mauritius route by issuing shares at exorbitantly high premium. “During the search operation, a complex network of some Mumbai and Thane-based shell companies was also unearthed. These shell companies exist only on paper and created for the purpose of providing accommodative entries. Preliminary analysis has revealed  that the total quantum of accommodation entries provided by these shell entities exceeds Rs 1500 crore,” the IT department said.

It added that till date, unaccounted cash of Rs 1 crore and jewellery to the tune of Rs 22 lakh has been seized.

An Infra.Market spokesperson said, “We continue to cooperate with the authorities and provide all necessary information to the department. Since the matter is sub judice, we would not like to comment further.”

Notably, Infra.Market was last valued at $2.5 billion in August last year after entering the unicorn club in March 2021. The company’s financials have made it hugely attractive venture for investors with the start-up looking to raise more funds at over $4 billion valuation, according to some media reports.

Unlike many unicorn start-ups, Infra.market has grown its profit base even as the expenses also markedly shot up in FY21. As per the company’s FY21 financials, the firm's profits grew to Rs 36 crore, compared to Rs 8.7 crore in FY20. The revenue for FY21 was Rs 1,234 crore compared to Rs 351 crore in FY20.

The company counts Accel India, Tiger Global, Nexus Venture Partners and Innoven Capital as its major investors.