Income Tax dept holds search & seizure operation on 3 commission groups in Punjab, Haryana

On September 8, the Income Tax Department conducted search and seizure operations on three key Commission agent groups. These groups were based in Punjab and operated in a variety of locations throughout Punjab and Haryana. Apart from the business of commission agents, these groups operate steel rolling mills, cold storage, general mills, jewellery shops, poultry, rice mills, oil mills, and flour mills.

These organisations were hiding their business invoices and inflating their expenses, according to the search results. They also did not account for the vast majority of cash receipts and payments. A lot of documentation evidencing cash payments of on-money in the acquisition of immovable properties have been collected and seized. It was discovered in one of the groups that fruit purchases were made at a low cost during the harvest season, but sales were made at a very high rate after the items were stored in cold storage during the offseason.

IT department conducts search & seizure operations on three commission agent groups

Other groups have followed a similar strategy. Books of accounts (Kacha Khata Bahi) in the Laddo script have been discovered. The books showed significant unaccounted transactions in crores of rupees. With the help of an expert, these books of account are being deciphered. Parallel sets of books of accounts for some commercial concerns have also been discovered. These show suppression of gross business receipts in crores on a yearly basis. Farmers are offered cash advances in the crores as well, with interest rates ranging from 1.5% to 3.00% per month. The interest is paid in cash and is not recorded in the books. Cash transactions involving the poultry industry and a rice sheller worth more than Rs. 9 crores have been discovered. Unaccounted purchases of Rs. 1.29 crore have also been discovered at one of the Jalandhar locations. There were details of unreported sales discovered.

Two suspicious Benami firms in employee names; unaccounted transactions in crores

As informed by the government press release on this incident, two suspected Benami firms in the names of employees have been discovered. The turnovers for these are in crores per year. In one of the concerns, the primary assessee has admitted that payments in violation of Section 40A(3) of the Income-Tax Act, 1961 have been made over the years. The transactions amount to crores. They accounted for the payments after they split the payments in the account books. In one of the concerns, the primary assessee has admitted that payments in violation of Section 40A(3) of the Income-Tax Act, 1961 have been made over the years. The transactions amount to crores. They accounted for the payments after they split the payments in the account books. 

Along with all of the above mentioned, the other findings were:

• Unaccounted investment in immovable property in the amount of Rs. 3.40 crore. (The digital evidence discovered has been confiscated at several locations, and its study is underway.)
• The diversion of business funds as interest-free loans/advances to family members of one of the groups.
• Unaccounted cash totalling Rs.1.70 crore.
• Unidentified jewellery worth Rs. 1.50 crore.
• Unexplained supply of flour worth Rs. 1.50 crore. 

A difference in finished goods stock has been discovered in Steel Rolling Mills, and stocktaking of raw material (scrap) is currently proceeding. Unaccounted finished goods stock of more than Rs 25 lakh has yet to be determined. Eight bank lockers have been put under restraint. The search is still going on, and more investigations are being conducted.

(IMAGE: PTI / REPRESENTATIVE IMAGE)