Income Tax Department conducts search operations in Maharashtra, Gujarat and Delhi on certain Indian companies and their associate concerns, controlled by a neighbouring country


The Income Tax Department has carried out search and seizure operations  on certain Indian companies and their associate concerns, controlled by a  neighboring country on 16.11.2021. These companies are engaged in the business  of chemicals, ball bearings, machinery parts, and Injection moulding machinery.  The search action covered around 20 premises spread over Mumbai, Ahmedabad  and Gandhidham in Gujarat and also in Delhi.

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. It has been found that these companies are indulging in tax evasion through  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. An estimated amount of Rs 20 crore was  transferred in the last 2 years through the above modus operandi.

Investigations have revealed that a Mumbai-based professional firm not only  assisted in formation of these shell companies but also provided dummy directors to  these shell companies. The investigations have also shown that these dummy  directors were either the employees/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. The professional firm is also instrumental in  assisting the foreign nationals by providing its addresses for banking and other  regulatory requirements.

One of such companies trading in chemicals was found to be routing the claim  of purchases through Marshall Island, a low tax jurisdiction. The company actually

purchased items worth Rs. 56 crore from a neighbouring company but the same has  been billed from Marshall Island. However, 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 further unearthed during the search proceedings  that this Indian company was also involved in taking non-genuine purchase bills to  reduce its tax liability and also paid unaccounted cash for purchase of land in India.

The search action has already resulted in the seizure of unaccounted cash of  about Rs. 66 lakh. Bank accounts of some of the companies, with aggregate bank  balances of about Rs. 28 crore, have been put under restraint.

Further investigations are under progress.

Source –

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