Income Tax Department raids 27 locations across Mumbai, Delhi; cash worth Rs 1.4 Cr seized

The Income Tax (I-T) Department recently conducted raids at as many as 27 locations across Mumbai and Delhi NCR, on July 5. The raids were carried out on a group engaged in Agro and Textile business, and another group of entry operators, a press release from the Ministry of Finance stated.

A large number of incriminating evidences in the form of hard copy documents and digital data have been discovered and seized by the department.

"It was found during investigation that most of the turnover of the listed companies of the main group has been generated through circular trading. The promoter of the group was involved in systematic manipulation of performance of certain group companies on stock markets, with the help of stock brokers," said the press release.

"Several instances of out of books payment to some stock brokers for unlawful purposes, have also been found. All such irregularities have been admitted by both, the promoter and the stock brokers. The group is also supported by a professional person, who is primarily engaged in providing accommodation entries to several other groups, in exchange of cash," the release added.

The evidence collected by the department showed that the group had amassed a sizeable sum of money by claiming bogus purchases of various materials including packing material of more than Rs. 100 crore. The business has allegedly engaged in over Rs 150 crore worth of unreported sales of agricultural and textile products. 

Also discovered and seized were handwritten diaries that contained cash transactions which have been properly verified by the statements of some of the counterparties and beneficiaries included in the search operation, the release further read

Unaccounted cash worth Rs 1.4 Crore seized during raids: Ministry of Finance

From the searches conducted on a another group that was involved in providing accommodation entry, which is a fraud, that entails breaking up huge amount of unaccounted money into small and less-suspicious amounts, it was found that the group operates many Limited Liability Partnerships (LLP), companies and proprietorship concerns through which, the accommodation entry of polished diamonds and shares were disguised to look like genuine businesses.

The main people involved in the group have come out clean and stated under oath, about arranging accommodation entries pertaining to expenses and unsecured loans for various beneficiaries, for cash. The release concluded by stating that unaccounted cash of Rs 1.4 crore has been seized during this search operation and that further investigation is in progress.

(With inputs from ANI)

Image: PTI