Income Tax raids Chennai-based IT infrastructure group, detects black money Rs 1,000 crore

New Delhi: The Income Tax division has carried out searches in opposition to a Chennai-based IT infrastructure group and unearthed proof referring to investments in a Singapore registered firm. The raids had been carried out at 5 places in Chennai and Madurai on Wednesday.

The search has led to the detection of an unaccounted revenue of round Rs 1000 crore, out of which, disclosure of extra revenue of Rs 337 crore has already been made by the assessee, in addition to actionable points below Benami and Black Money Acts.

The shareholding of this IT firm is held by two corporations, one owned by the group searched, whereas the opposite agency is a subsidiary of a serious infrastructure improvement and financing group. It has been discovered that the corporate belonging to the searched group has invested a really nominal quantity though it has 72 % shareholding, whereas the opposite firm having 28 % shareholding solely has invested virtually the whole cash, in keeping with the I-T division. 

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This has resulted in a profit/acquire of round Rs 200 crore within the fingers of the corporate belonging to the searched group, which was not disclosed by it in its return of revenue and likewise within the FA Schedule. The suppression of international revenue acquired within the type of share subscription equal to Rs 200 crore, which is taxable in India within the fingers of the shareholder, was ascertained by the I-T sleuths.

Further, proceedings shall be initiated below the Black Money Act, 2015 for not disclosing international belongings/helpful curiosity within the FA Schedule of the revenue tax return. The current worth of this funding exceeds Rs 354 crore.

During the search, the I-T division discovered that the group had lately acquired 5 shell corporations, which had been used to siphon out as a lot as Rs 337 crore from the principle group firm by elevating bogus payments and with out doing any actual enterprise in these corporations. 

The siphoned cash was transferred overseas and utilized for the acquisition of shares within the title of the son of the principle assessee. One of the administrators admitted that they’ve diverted funds by means of these corporations. 

Evidence has additionally been discovered concerning allotment of desire shares price Rs 150 crore in 2009 within the group firm by passing accounting entries solely, to undertaking inflated capital earlier than banks and monetary establishments to acquire funds. Allotment of one other Rs 150 crore price desire shares in 2015 from funds from group corporations, who in flip took loans/entries, is being examined.

During the search, it was additionally discovered that the group had borrowed funds from banks on curiosity and diverted to different group corporations freed from curiosity for investments in properties. The whole curiosity disallowance on this rely works out to about Rs.423 crore.

Further, the search additionally revealed that the group had bought about 800 acres of land price not less than Rs 500 crore, within the names of assorted shell corporations from the funds offered by the principle group concern. Applicability of the Prohibition of Benami Property Transactions Act, 1988 to those transactions is being examined.

It was additionally seen that there was a switch of considerable shareholdings in the course of the present 12 months at a value a lot decrease than the honest market worth to be decided as per IT Rules, 1962. 

In view of this, substantial additions are more likely to be made below part 56(2)(x) of the IT Act, 1961(the  Act) within the case of the customer and capital positive aspects below part 50CA of the Act, within the fingers of the vendor. The quantum of this shall be decided in the end. Meanwhile, additional investigations are occurring.