Jharkhand: IT Department Discovers Multi-Crore Tax Evasion

The Income Tax Department discovered a multi-crore rupee tax evasion after raiding a Jharkhand-based group involved in the business and sale of sponge iron and iron ingots and bars, according to the CBDT on Monday.

The Group was manufacturing and selling outside the books and reinvesting unaccounted revenue through a vast network of shell companies. The sale of unaccounted production worth Rs. 185 crore is one of the preliminary results.

The details of such unaccounted transactions have been recovered and analysed on digital media. Actual production details that were not documented in ordinary books were rediscovered.

This group's goods are used in the construction of buildings and other infrastructure projects, and unaccounted production is sold in cash in eastern India. The money generated is re-invested in the Group as share capital and unsecured loans from Kolkata-based shell companies. The funds are also used to buy real estate and high-end personal items.

According to seized documents, the Group's unaccounted revenue of around Rs. 100 crore was re-invested in the form of the share capital at extremely high premiums through Kolkata-based shell companies.
Original share certificates for these shell companies were also discovered in the company's office. According to investigations, the so-called shareholders do not exist.

The Group has also taken out unsecured loans worth around Rs.25 crore from Kolkata-based shell companies, suggesting that it is ploughing back its own unaccounted revenue. A total of Rs. 30 crores in bogus commodity profit entries has been acquired by the Group.

During the search, unaccounted cash worth Rs. 3.07 crore was discovered, as well as unaccounted for bullion and jewellery worth Rs. 1.28 crore.