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I-T dept detects Rs 550 cr in hidden income after raids on Hyderabad-based pharma group

The Income Tax Department has detected “unaccounted” income of Rs 550 crore during a search and seizure operation carried out on a major pharmaceutical group based in Hyderabad on October 6.

During the raid, issues relating to discrepancies in purchases made from bogus and non-existent entities and artificial inflation of certain heads of expenditure were detected.

The Income Tax Department has detected “unaccounted” income of Rs 550 crore and seized over Rs 142 crore in cash after it recently raided a Hyderabad-based pharmaceutical group.

The search and seizure operations were carried out by the Income Tax Department on October 6 at about 50 locations in six states.

The Hyderabad-based pharmaceutical group is engaged in the manufacturing of intermediates, active pharmaceutical ingredients (APIs) and formulations. The majority of the products are exported to foreign countries i.e. USA, Europe, Dubai and other African countries.

During the searches, hideouts were identified where a second set of books of accounts and cash were found.

Incriminating evidence in the form of digital media, pen drives, documents, etc. has been found and seized and digital “evidences” were gathered from SAP and ERP software maintained by the assessee group.

During the raid, issues relating to discrepancies in purchases made from bogus and non-existent entities and artificial inflation of certain heads of expenditure were detected. Further, evidence of on-money payment for the purchase of land was also found.

Various other legal issues were also identified, such as personal expenses being booked in the company’s books and land purchased by related parties “below government registration value”.

“During the search, several bank lockers have been found, out of which 16 lockers have been operated. The searches have resulted in the seizure of unexplained cash amounting to Rs 142.87 crore, so far,” the Central Board of Direct Taxes (CBDT) said in a statement.

Further investigations and quantification of undisclosed income detected is in progress.

ALSO READ | I-T dept conducts searches in Mumbai, Bengaluru, Noida, finds $100 million parked in tax havens

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