The Income Tax Department has found that Hero MotoCorp allegedly raised more than Rs 1000 crores in bogus expenses.
The department had swooped down on Hero Motocorp offices in Delhi and Gurugram, and at the residence of the company's chairman and CEO, Pawan Munjal, on March 23. The raids continued till March 26.
Apart from the bogus expenses, the evidence seized in the form of hard copy and digital data revealed huge unaccounted cash expenditure, and accommodation entries to the tune of 10 billion rupees, says an Asian News International report.
One big transaction was for purchase of a farmhouse by Munjal in Chhattarpur, on the outskirts of Delhi. The market price of the farmhouse was altered to save tax, and for this purpose, an amount of over Rs 100 crore was paid in cash, the news agency has claimed, citing sources.
According to section 269SS of Income Tax Act, while transacting Immovable Property, 100 per cent penalty will be levied if the seller has accepted an amount of Rs 20,000 or more in cash from the buyer.
After the news of the bogus transactions trickled out, the company’s stock plunged and ended 7% lower.
The two-wheeler maker has said in a statement that the alleged bogus expenses were not borne out by any document and are speculative in nature.
Shares down
At 2.22 PM, on the NSE, the company's shares were trading 0.29 percent or Rs (-)6.95 down at Rs 2,371.
On March 23, share price of the country's largest two-wheeler maker Hero MotoCorp slumped by nearly 4 percent on March 23, after the Income Tax Department raided several premises linked to the senior management of the company, including its chairman and MD Pawan Munjal, over alleged tax evasion.
