The Income Tax (I-T) Department had carried out search and seizure operations on certain Indian companies and their associate concerns, controlled by a neighboring country on November 16. These companies are engaged in the business of chemicals, ball bearings, machinery parts, and Injection molding machinery.
The search action covered around 20 premises spread over Mumbai, Ahmedabad and Gandhi Dham in Gujarat and also in Delhi. 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. The I-T department refused to disclose names of the companies.
"A large amount 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 neighboring country. An estimated amount of Rs 20 crore was transferred in the last two years through the above modus operandi," I-T department claimed.
"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 the 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," an statement issued by the department claimed.
It added, "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 country 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."
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