I-T Dept detects Rs 435-cr undisclosed income after raids on Tamil Nadu firm; company inflates expenditures using bogus invoices

It was found, the CBDT said, that the company would pay for such bogus expenses by cheque or RTGS and then receive the cash back.

Press Trust of India November 18, 2019 12:11:32 IST
I-T Dept detects Rs 435-cr undisclosed income after raids on Tamil Nadu firm; company inflates expenditures using bogus invoices
  • Unaccounted cash of Rs 32.6 crore and about 10 kg of gold jewellery has been seized during the search operations that were launched on 15 November

  • The company is in the business of manufacturing certain specialised materials which are supplied to the health sector in India and abroad, CBDT said

  • The major finding of the search action is that the company has systematically inflated its expenditure using bogus or fabricated invoices

New Delhi: The income tax department has detected alleged undisclosed income of Rs 435 crore after it raided a Tamil Nadu-based company, the CBDT said on Sunday.

Unaccounted cash of Rs 32.6 crore and about 10 kg of gold jewellery has been seized during the search operations that were launched on 15 November at twenty premises in "a tier 3 city of Tamil Nadu", it said without disclosing the exact locations.

IT Dept detects Rs 435cr undisclosed income after raids on Tamil Nadu firm company inflates expenditures using bogus invoices

Representational image. Reuters.

"The company is in the business of manufacturing certain specialised materials which are supplied to the health sector in India and abroad," the Central Board of Direct Taxes (CBDT) said in a statement.

The CBDT is the policy-making body for the I-T department.

It said the company, which was not identified, was "indulging in substantial tax evasion".

"The major finding of the search action is that the company has systematically inflated its expenditure using bogus or fabricated invoices. By booking such non-existent expenditure in its books of account, the company and its promoters have suppressed the true income of the company over the years," it said.

It was found, the CBDT said, that the company would pay for such bogus expenses by cheque or RTGS and then receive the cash back.

"The unaccounted income so generated has been deployed by the company's promoters into investments in immovable properties by making unaccounted payments, further investments in the business itself as share capital and in fixed bank deposits, cash and other valuables," it said.

The undisclosed income of the company and its promoters is estimated at about Rs 435 crore, it said.

Further enquiries are in progress, the statement said.

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