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Two held for defrauding Government Exchequer of more than Rs 392 crore

 

The officers of Central Goods and Services Tax (CGST) Commissionerate, Delhi (East) have achieved success with their investigations leading to the unearthing of a massive network of fictitious firms to generate and avail fake Input Tax Credit (ITC) of Goods and Services Tax (GST), a release issued by the Ministry of Finance informed.

The network of fictitious companies was being operated by one Naresh Dhoundiyal in connivance with one Devender Kumar Goyal, who is a Charted Accountant by profession. Both Naresh Dhoundiyal and Devender Kumar Goyal are former employees of Essel Group. Though they are presently not working with the Essel group officially, however, they are passing on inadmissible ITC to the said group. Investigations indicate that a layer of genuine looking fictitious intermediatory companies was created to pass on bogus ITC from non-existent and fake firms to the companies of Essel Group without actual supply of any goods or services. This was apparently done to enable Essel Group to avail inadmissible Input Tax Credit of GST, book expenses to evade Income Tax and inflate their turnover to push the share prices of their listed companies, the release said.

Naresh Dhoundiyal incorporated multiple fictitious intermediatory companies for Essel Group whereas, Devender Kumar Goyal, CA arranged the fake invoices of various other fictitious and non-existent firms for such fictitious intermediatory companies. The total fake Input Tax Credit passed on by such fictitious intermediatory companies is quantified to be Rs. 92.18 crore whereas, the total fake Input Tax Credit passed on by other fictitious and non-existent firms pertaining to the larger network is quantified to be more than Rs. 300 crore. The syndicate has thus defrauded the Government exchequer of more than Rs. 392 crore by issuing bogus invoices of more that Rs. 3,000 crore without actual supply of any goods or services which is likely to increase as the investigation progresses. It is pertinent to mention that M/s Vertilink Media Solutions Private Limited has admitted the evasion and have voluntarily deposited Rs 2.5 crore.

Naresh Dhoundiyal and Devender Kumar Goyal, CA hatched a deep-rooted criminal conspiracy with the intent to defraud the Government exchequer and knowingly committed offences specified under Section 132(1)(b) and 132(1)(c) of the CGST Act, 2017 which are cognizable and non-bailable offences as per the provisions of Section 132(5) and punishable under clause (i) of subsection 1 of Section 132 of the Act. Naresh Dhoundiyal and Devender Kumar Goyal, CA have been arrested under Section 69(1) of the CGST Act, 2017 and produced before the Duty Magistrate on 4th March 2021 who remanded them to judicial custody of 14 days till 18th March 2021. Further investigation in the case is in process.

It is pertinent to mention here that since the inception of GST Central Tax, Delhi Zone has made 30 arrests in various cases involving GST evasion amounting to more than Rs 4,450.86 crore, the release added.

#Delhi #GST
05-March-2021
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ISIS Terrorist sentenced to seven years rigorous imprisonment in Delhi ISIS Conspiracy Case

 

NIA Special Court in Patiala House, New Delhi, today sentenced Imran Khan Pathan to seven years rigorous imprisonment and fine in ISIS Conspiracy Delhi Case.

This case was registered by NIA on 9th December 2015 under section 125 of IPC and sections 18, 18B, 38 & 39 of UA(P) Act, 1967 and pertains to larger criminal conspiracy hatched by the proscribed terrorist organisation ISIS to establish its base in India by radicalizing and recruiting Muslim youth through different social media platforms. As a result, radicalised youths expressed their solidarity, allegiance and support to ISIS and left India to join ISIS.

After completion of the investigation, NIA had filed charge-sheet and supplementary charge-sheets against 17 accused including Imran Khan Pathan@ Imran. Earlier, 16 accused persons were convicted and sentenced upto 10 years rigorous imprisonment by the NIA Special Court vide its orders on 16th October 2020 and 16th December 2020 for the conspiracy hatched by ISIS handlers based in Syria and subsequently formation of group namely "Junood-ul-Khilafa-fil-Hind" owing to its allegiance to ISIS, a proscribed terrorist organisation.

Accused Imran Khan Pathan was in direct touch with ISIS handler namely Yusuf-Al-Hindi. He had received funds to the tune of Rs 50,000 from one of the associates of Shafi Armar namely Mudabbir Mushtaq Sheikh (already convicted) for making an IED and to further the activities of ISIS in India. With this judgement, all 17 charge-sheeted accused involved in this case stand convicted by the NIA Special Court, Delhi.

#NIA #ISIS
05-March-2021
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Notorious Nigerian Drug Peddler nabbed by Bengaluru Police

 

A notorious Nigerian drug peddler was arrested by the Bengaluru City Police and a narcotic substance was seized from him.

The 32-year-old Ugochukwu Victor was intensely questioned by the police. On information received from him and technical analysis, two more houses were searched, police informed today.

On the further questioning him, names of two others - Master Chandra and Keshav - arose. An arrest warrant has been issued against them and their search is on.

#Bengaluru #Drugs #BengaluruPolice
05-March-2021
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Leading actress, Production House, Talent Management Cos under IT grip

 

The Income Tax Department is carrying out search and survey operations since 3rd March 2021 on two leading film production companies, a leading actress and two Talent Management companies in Mumbai, a release issued by the Ministry of Finance said.

The search operation is being carried out in Mumbai, Pune, Delhi and Hyderabad. The group is mainly engaged in the business of Production of Motion Pictures, Web Series, acting, direction and talent Management of celebrities and other artists. A total of 28 premises are being covered in different locations which include residences and offices.

During the search, evidence of huge suppression of income by the leading Film Production house as against its actual box office collections has been unearthed. The company officials have not been able to explain the discrepancy of around Rs 300 crore. 

Evidence related to manipulation and under-valuation of share transactions of the production house amongst the film directors and shareholders, having tax implication of about Rs 350 crore has been found and is being probed further.

Evidence of cash receipts by the leading actress amounting to Rs 5 crore has been recovered and is being investigated further. 

Apart from this, non-genuine/bogus expenditure to related concerns by the leading producers/director having tax implication of about Rs 20 crore has been detected. Similar findings have also been made in the case of the leading actress.

At the office premises of the two talent management companies, a huge amount of digital data has been seized in the form of emails, WhatsApp chats, hard disk etc which are under investigation.

During the search, 7 bank lockers have been found which have been placed under restraint. The search operation is continuing in all the premises.

#Mumbai #IncomeTaxDepartment
04-March-2021
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Income Tax Department conducts searches in Hyderabad

 

The Income Tax Department carried out search and seizure operations on 24th February 2021 on a major Pharmaceutical group based out of Hyderabad. 

This Pharmaceutical group is engaged in the business of manufacturing intermediates, Active Pharmaceutical Ingredients (APIs) and formulations. The majority of the total manufactured products are exported to various countries i.e. USA / Europe. The search operation was carried out at about 20 locations in 5 States.

Searches have resulted in the seizure of cash amounting to Rs 1.66 crore. During the search action incriminating evidence in the form of digital media, pen drives, documents, etc. have been found and seized. Incriminating digital pieces of evidence were gathered from SAP @ ERP software maintained by the assessee group.

During these searches, issues relating to purchases made from bogus and non-existent entities, artificial inflation of certain heads of expenditure, along with suppression of receipts relating to by-product sale were detected. Further, evidence of on-money payment for the purchase of lands was also found. Multiple other legal issues were also identified such as personal expenses being booked in the company’s books and land purchased by related concerns/individuals below govt. SRO value.

The search has led to the unearthing of evidence relating to unaccounted income of around Rs 400 crore out of which the assessee group has admitted an additional income of Rs 350 crore.

Further investigations are in progress.

#Hyderabad #IncomeTaxDepartment
01-March-2021
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Huge Income Tax fraud by medical colleges in Karnataka, Kerala

 

The Income Tax Department conducted search and seizure operation on 17th February 2021 on 9 major Trusts registered in Bengaluru and Mangaluru, which are running educational institutes including medical colleges. Searches were conducted at 56 different locations across Karnataka and Kerala.

Key Findings:

  1. During the course of the search and seizure operation, it was found that the transparent selection process to Medical colleges through NEET has been subverted by Trustees and key persons running these Medical Colleges in collusion with agents/brokers and some students who got high ranks in NEET Examination.
  2. The first stage of malpractice is that some high ranking students in NEET examination take admission to MBBS courses through state counselling (who have no intention to join the said colleges as they have secured admissions or likely to get admission elsewhere), thereby blocking seats in the medical stream in a Medical college during Karnataka Examinations Authority (KEA) counselling process, in connivance with Agents/ Middlemen/Converters (who provide service of converting the regular seats to Management seats).
  3. Subsequently, these students withdraw from the admission process thereby making the vacant seats available for the college management.
  4. Such seats are made available to the college management for filling up through the "Stray Vacancies Round" (seats remaining vacant or unfilled in a college after mop-up round). 
  5. In this Round, the seats are filled by the college management by admitting less meritorious candidates (Low rank in NEET) after collecting huge sums as capitation fee/donations in cash which are illegal under the Karnataka Educational Institutions (Prohibition of Capitation Fee) Act,1984.
  6. The capitation fee/ Donations are collected through a network of brokers/ agents employed by the key persons/Trustees of these medical colleges.
  7. The search operation has resulted in detecting incriminating evidence regarding cash-for-seat malpractices for admission to MBBS, BDS and Post Graduate seats in the form of notebooks, handwritten diaries, excel sheets containing the details of cash received from students/brokers for admission in these colleges for various years.
  8. It was also observed that the management, faculty, staff, meritorious students and brokers are working in close nexus to manipulate the online admission process.
  9. Also, there is evidence indicating that one of the medical colleges have some sort of "package arrangement" for passing management quota students in written examination and viva voce for a fixed sum ranging from Rs 1 lakh to Rs 2 lakh.
  10. Further, there is evidence which prima facie suggests that the cash money accepted by manipulating the online admission process in these colleges has been diverted for the non-charitable purpose by the Trustees which is clearly in violation of Sec 12AA of the Income-tax Act, 1961.
  11. Apart from this, evidence has been found regarding a large number of investments made in immovable properties with huge cash component attracting provisions of section 69 of the Income-tax Act, 1961.
  12. One of the colleges has diversified into the business of timber/plywood industries where evidence regarding under-invoicing has also been found. 
  13. So far, the evidence gathered indicates that Rs 402.78 crore has been accepted as illegal capitation fees by manipulating the online admission process and the same has not been disclosed to the Income Tax Department.
  14. Searches have resulted in the seizure of cash amounting to Rs 15.09 crore.
  15. Gold Jewellery of 81 Kg (valued at Rs 30 crore), 50-carat diamonds and 40 kg of silver articles have been found from the residential premises of the trustees and are prima facie, unexplained.
  16. Evidence of undisclosed foreign assets of Rs 2.39 crore in Ghana has also been found apart from evidence of huge investments in 35 Luxury cars in Benami names.

Further investigation is in progress in this case.

#IncomeTaxDepartment
18-February-2021
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ED attaches properties of Amnesty International

 

Enforcement Directorate has attached assets worth crores of Amnesty International India Pvt. Ltd.

An official tweet stated, "ED has provisionally attached movable properties worth Rs. 17.66 Crores in case of M/s Amnesty International India Pvt. Ltd. and others."

Ministry of Home Affairs had condemned the stand taken and the statements made by Amnesty International in September last year. 

MHA had said in a statement, 

"All the glossy statements about humanitarian work and speaking truth to power are nothing but a ploy to divert attention from their activities which were in clear contravention of laid down Indian laws. Such statements are also an attempt to extraneously influence the course of investigations by multiple agencies into the irregularities and illegalities carried out over the last few years."

#AmnestyInternational
16-February-2021
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Income Tax Department carries out searches at premises of Gutkha manufacturer in Mumbai

 

The Income Tax Department carried out search and survey operations on a group based in Mumbai on 8th February 2021.

This group is mainly engaged in the business of manufacturing of Gutkha, Pan masala and allied substances, besides having operations in hospitality sector. The searches were carried out across many locations in India and concluded on 13th February 2021.

The search and seizure action has led to detection of foreign assets lying with a company registered in tax-haven British Virgin Islands (BVI) with an office in Dubai and controlled and managed by the Chairman of the group. The net worth of the BVI company is Rs 830 crore created by siphoning of funds from India. This fund has been round tripped to India in the form of share premium amounting to Rs 638 crore in the flagship companies of the group. During the search action, various digital evidences and forensic analysis have yielded email communication, establishing control and management of the company with the promoter of the group searched.

One of the employees, who was also a shareholder in the BVI company, was identified and cross examined with the promoter. It has been accepted by the parties involved that the employee was not aware about being a shareholder in the company and he had signed papers on the instruction of the main promoter.

Further, it has been found that the group has availed bogus deduction under section 80IC of the Income-tax Act, 1961 to an extent of Rs 398 crore. The group set up 2 entities in Himachal Pradesh and the group was found to indulge in sham transactions in order to claim the aforesaid false deduction.

Apart from the above, unaccounted production of pan masala of an amount of Rs 247 crore at 2 factory premises of the group has also been detected during the search.

It has also been seen that the assessee has falsely claimed deduction u/s 10AA of the Income-tax Act, 1961 of an amount of Rs 63 crore in the Gandhi Dham unit.

During the search action, cash of Rs 13 lakh has been seized and jewellery amounting to Rs 7 crore was found and has been put under prohibitory orders. Prohibitory orders have also been placed on 16 lockers and in 11 premises. Thus, the search action has led to detection of unaccounted transactions of around Rs. 1500 crore, so far.

Further investigations are in progress.

#Mumbai #IncomeTaxDepartment
15-February-2021
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DGGI Gurugram arrests man for fraudulently availing input tax credit worth crores

 

The Directorate General of GST Intelligence (DGGI) Gurugram Zonal Unit (GZU), Haryana, has arrested a person on charges of passing and availment of fake ITC while operating dummy, fake and non-existent firms and encashing this unduly availed input tax credit (ITC) through IGST refund mode by showing export of cigarettes.

Ritesh Aggarwal is a resident of Bahadurgarh, Haryana.

It became apparent from the investigation that Aggarwal, the proprietor of M/s SR Impex was de-facto controller of another firm — M/s SR International. In the supply chain of these firm were found to be six other dummy firms by the names of M/s Joles Trading Co, AS Traders, AR Traders, Om Traders, Capital India & S.M enterprises — all controlled by Agarwal. In all these firms, Aggarwal had availed and passed on ITC of Rs 376 crore by means of billing without goods. Also, Aggarwal was sanctioned refund of Rs 37.13 crore from the department.

In addition, Aggarwal was found to be a habitual offender. In an earlier case also, Show Cause Notice for demanding of Rs 26.53 crore was issued to him for similar modus operandi of operating fake firm, M/s SS & Co. (GSTIN 06DJUPD5067G2ZW) and availing and passing on fake ITC. 

Further, Aggarwal, who also adopts the alias of Ravi Gupta, was found to be accused in the Show Cause Notice dated 1st March 2019 issued by the DGRI wherein fraudulent drawback was availed on imported areca nuts by forging the Certificate of Origins.

The investigation spanned multiple locations in Delhi and Haryana and based on documentary evidence and statement recorded of many suppliers of these firms, it was ascertained that Aggarwal is a key person in orchestrating this racket of making fake/non-existent/dummy firms and wrongly availment and passing on on ITC of Rs 376 crore. Accordingly, Aggarwal was arrested yesterday and produced before Duty MM, Patiala House Court Delhi, who ordered judicial custody.

Further investigations in the matter is underway.

#DGGI #GST #Haryana
10-February-2021
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Huge seizure of narcotics by Chennai Air Cargo Customs

 

Based on specific intelligence, officers of Chennai Air Cargo Customs intercepted an export consignment suspected to contain narcotic drugs at Air Cargo Export Shed, which was destined for Doha(Qatar).

In the shipping bill, 7 packages containing 55 weighing machines were declared. When the packages were opened, Digital weighing scales were found inside. On lifting, the weighing scale appeared to be unusually heavy, which led to suspicion. All the weighing machines were opened with a screwdriver and it was found that there was concealment in 52 machines.

It was noticed that there was a specially designed metal box fixed by tape to the bottom of the scale. On opening the box, two pieces of dark brown material in cake form wrapped with plastic strips and sheets was found concealed inside. The material tested positive for Hashish. Total 44 kg of Hashish amounting to Rs 4.4 crore was recovered from the 44 machines. Methaphetamine crystals weighing 700 grams and valued at Rs 70 lakhs were recovered from two machines. Both Hashish and Meth crystals valued at Rs 5.1 crore were seized under NDPS Act.

Also, 1620 grams of Pregabalin capsules a prescription drug used in anxiety disorder and fibromylgia were recovered from 6 machines and seized. This drug does not fall in the controlled drug list in India, but in many countries abroad it is a controlled drug.

The Exporter M/s SreeAalaya was sending this consignment to Doha(Qatar). Following the searches, the exporter and one staff of the Custom-house agent have also been arrested.  

Further investigation is underway.

The above information was given in a press release issued by Commissioner of Customs, Chennai Air Cargo.

#ChennaiAirCustoms #Drugs
09-February-2021