The Income Tax Department seized Rs 66 lakh in unaccounted income after conducting search and seizure operations on certain Indian companies and their associate concerns, controlled by a neighbouring country.
Bank accounts of some of the companies, with aggregate bank balances of about Rs 28 crore, have been put under restraint.
The search action was conducted on November 16 and covered around 20 premises spread over Mumbai, Ahmedabad and Gandhidham in Gujarat and also in Delhi. These companies under the scanner are in the business of chemicals, ball bearings, machinery parts, and injection moulding machinery.
"A large number of incriminating evidence in the form of digital data showing earning of huge unaccounted income by these companies has been found and seized," noted the Ministry of Finance in an official statement.
The I-T department discovered that the companies are indulging in tax evasion through the manipulation of books of accounts. The analysis of evidence has revealed that these companies have indulged in transferring funds by using a network of shell companies to a neighbouring country. The government statement did not name the neighbouring country.
An estimated amount of Rs 20 crore was transferred in the last two years through this method.
Investigations have revealed that a Mumbai-based professional firm not only assisted in the formation of these shell companies but also provided dummy directors to these shell companies.
It has also been discovered that these dummy directors were either the employees or drivers of the professional firm or they were persons of no means
"On questioning, they admitted that they were not aware of the activities of these companies and that they had been signing on documents as per the instructions of the key functionaries," read the statement.
The professional firm is also instrumental in assisting the foreign nationals by providing its addresses for banking and other regulatory requirements, explained the Ministry.
One other company, which is involved in trading in chemicals, was found to be routing the claim of purchases through Marshall Island, a low tax jurisdiction. The company purchased items worth Rs 56 crore from a neighbouring company but the same has been billed from Marshall Island. The payment for such purchases has been made into the bank account of the Marshall Island-based company which is held in the neighbouring country.
It was also unearthed that this Indian company was involved in taking non-genuine purchase bills to reduce its tax liability and also paid unaccounted cash for the purchase of land in India.
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