Tax Raid: CBDT Raids 23 Premises Of Gujarat Diamond Firm

The Central Board of Direct Taxes (CBDT) claimed in a statement that the data suggests that the assessee has sold more than 95 crores of diamond waste in cash earned from its manufacturing activities, which remains unaccounted for and constitutes its income.

The search's highlight is the discovery of a considerable amount of unaccounted data in both paper and digital form, which was held in hidden locations under the custody of the company's trusted personnel in Surat, Navasari, and Mumbai.

For the last five years, the data includes proof of unaccounted purchases, unaccounted sales, taking accommodation entries for purchases against which cash is received, the movement of such cash and stock through angadia firms, keeping unaccounted cash with angadias, and investing such unaccounted income for the purchase of property and stock.
The assessee has accounted for the sale of around 2,742 crore of tiny diamonds in its accounts over the years, with a significant portion of purchases done in cash, but buy invoices obtained from accommodation entry providers, it claims.

During the raids, "unaccounted" cash and jewellery worth 1.95 crore was seized, as well as "unaccounted" diamond stock worth 10.98 crore, according to the statement.

Furthermore, the assessee made its significant acquisitions of rough diamonds through imports and export sales of completed larger diamonds through a Hong Kong-based entity that is effectively controlled and managed from India alone. According to the data, the assessee has spent Rs. 189 crore and sold Rs. 1040 crore through this firm in the last two years.

During the search, the whole financial transactions of real estate sales were discovered, resulting in the discovery of Rs. 80 crore in undeclared money. Furthermore, the sale transactions of shares related to the tile business were investigated, resulting in the discovery of Rs. 81 crore in unaccounted funds.