The income tax (I-T) department conducted a search and seizure operation on a leading automobile manufacturer group along with a company operating chartered flights and a real estate group of Delhi-National Capital Region (NCR) covering more than 35 premises. The I-T department has not revealed names of any entity. However, Hero MotoCorp Ltd, which has informed the exchanges that officials from the I-T department had visited and conducted search and seizure operations at its office during the previous week.
In a statement, the I-T department says, "During the course of the search operation, various incriminating documents and digital evidence have been found and seized indicating that the expenses ostensibly shown to have been claimed towards business purposes are not fully supported by evidences. Expenditure aggregating to more than Rs800 crore has been booked in the guise of purchase of services from a specific event management entity. This entity has siphoned-off the money by way of layering. Such claims towards non-business purposes are inadmissible expenditure under the provisions of the I-T Act, 1961."
"In the search, it was also found that 10 acres of farm land at Delhi was purchased through few paper companies. In such transactions, unaccounted cash component of over Rs60 crore was purportedly involved. The ultimate or real beneficiary of the land deal is a prominent person of the automobile manufacturer group. The intermediary who facilitated the said deal has admitted in his statement that major part of the sale consideration was paid in cash," it says.
Hero MotoCorp, in a regulatory filing on 29 March 2022, had denied media reports of I-T raids as 'speculative'. It says, "We wish to clarify that officials from the I-T department visited our offices in the previous week. The company has provided all support and cooperation, necessary documents and data to the authorities and will continue to do so if required. As and when the tax department concludes its findings and communicates to us, we will inform the exchanges suitably."
Last week, the company, in a clarification to BSE, accepted that officials from the I-T department had visited two of its offices in Delhi and Gurugram and the residence of its chairman and chief executive officer (CEO) Dr Pawan Munjal on 20 March 2022. "We have been informed that this is a routine inquiry, which is not uncommon before the end of the financial year," it added.
Apart from this, the tax authority also unearthed several incriminating documents from the premises of persons involved in the real estate business. These contain records of on-money transactions where cash was being received in lieu of sale of units in their various real estate projects across Delhi.
The I-T department says, "In the case of the company operating chartered flights, evidence related to booking of bogus expenses and non-recognition of income totalling to over Rs50 crore, rotation of funds and suspicious loans through a dubious non-banking finance company (NBFC) floated by a key person, layering and re-routing of funds through paper companies and claiming bogus interest expenses have also been unearthed."
"Undisclosed cash exceeding Rs1.35 crore has been seized and jewellery over Rs3 crore has been kept provisionally under restraint. Further investigations are in progress," the tax authority says.
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