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Centre extends date for linking of Aadhaar number with PAN


The Union Government has extended the last date for linking of Aadhaar number with PAN from 31st March, 2021 to 30th June, 2021, in view of the difficulties arising out of the COVID-19 pandemic, an official tweet by the Income Tax India informed.

Date for issue of notice under section 148 of Income-tax Act,1961, passing of consequential order for direction issued by the Dispute Resolution Panel (DRP) and processing of equalisation levy statements have also been extended to 30th April, 2021.

#IncomeTaxDepartment
31-March-2021
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Income Tax Department conducts searches in Kolkata

 

The Income Tax Department carried out a search and seizure operation on 9th March 2021 on various persons based in Kolkata, engaged in the business of Electrical equipment and trading of decorative lighting.

The cases were developed through market intelligence and field enquiries. Search and seizure action was carried out at more than 3 premises in Kolkata on the evening of 9th March 2021, a release issued yesterday by the Ministry of Finance informed.

The search action has resulted in the unearthing of incriminating pieces of evidence (both physical and electronic), where prima facie it has been observed that various bank accounts are being used by these persons for squaring off trade account with Chinese exporters. These products were allegedly not imported at arm's length price so as to have less impact of customs duty on imported products, thereby reducing the purchase price. Several unaccounted transactions have also been found related to the sale of electrical equipment in the domestic market. 

A preliminary enquiry has also indicated that the persons on whom search and seizure operations have been conducted are engaged in a clandestine operation, wherein they receive cash, convert them into the foreign exchange through individuals engaged in such conversion work (also covered) and through some bank accounts, the amount is transferred to foreign accounts of Chinese exporters who export different kinds of goods to Indian importers. Hence, part of the purchase cost is transferred to the accounts of Chinese exporters through this mode. Various mobile and electronic devices having such communication/evidences have been seized.

Unaccounted cash in excess of Rs 3 crore has been found, which has been seized. In one more separate action conducted by the Department, Rs 76 lakh has been seized.

Further investigations are in progress.

#Kolkata #IncomeTaxDepartment
11-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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Director General of Income Tax of Tamil Nadu, Puducherry set up a 24 x 7 Control Room

 

In the wake of the State Legislative Assembly General Election – 2021 to Tamil Nadu and Puducherry and Bye Election to Kanyakumari Parliamentary Constituency to be held on 6th April 2021, the Election Commission of India has sought the assistance of the Directorate General of the Income Tax (Investigations) to monitor election expenditure. 

The role of the Directorate is to provide assistance to ensure free and transparent fair elections by controlling the role played by unaccounted funds in the election process, stated a press release issued by the Additional Director of Income Tax (Inv.), Unit-2, Chennai Nodal Officer, Election Expenditure Monitoring.

To achieve this objective, the Investigation Directorate will take proactive steps to discover and seize unaccounted funds intended to be utilized for electioneering, the release said.

As a part of this initiative, the Director-General of Income Tax (Investigation), Tamil Nadu and Puducherry has set up a 24 x 7 Control Room with a Toll-free number, designated fax and facility of email and WhatsApp to receive complaints/information from the public.

The details of the same are given below:

Toll-free Telephone No.            :         1800 425 6669

Fax No.                                    :         044 – 28271915

E-mail                                      :         itcontrol.chn@gov.in

WhatsApp No.                          :         94453 94453       

Persons who have knowledge/information about storage, possession or movement of a large amount of cash have been requested to pass on the information through any one of the modes mentioned above, the release added.

#IncomeTaxDepartment #TamilNadu #Puducherry
03-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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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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Income Tax Department conducts major search and seizure operations in Jaipur, Thane

 

The Income Tax Department has carried out search and survey operations on 19th January in Jaipur on three groups, including one jeweller and two real-estate colonizers and developers. Searches were conducted at 20 premises and a survey was conducted at 11 premises.

Details:

One of the groups is a famous builder, developer and colonizer in Jaipur. Many incriminating documents and digital data in the form of unaccounted receipts, unexplained development expenses, unexplained assets, cash loans and advances, on-money receipts were found and seized during the search. The highlight of the search was that the complete details of unaccounted transactions of the last 6-7 years of this group maintained in several registers, slip pads, day to day kacchi cash book, expense sheets and diaries hidden in the basement were unearthed and seized from the main business premises. Total unaccounted transactions amounting to Rs. 650 crore have been detected, so far in this group.

The second group is a multi-venture activity group involved in the business of precious and semi-precious stones, jewellery, antiques, handicrafts, carpets, textiles etc. During the search, a concealed cavity was detected by the concerted efforts of the team at the main business premises of the assessee. The entire detail of unaccounted manufacturing activity of gold and silver ornaments for the last 6 years was found from the said cavity. It is important to note that this manufacturing activity has never been reported in any of the Returns of Income filed by the group. Documents relating to Benami property amounting to Rs 15 crore were also unearthed from the secret chamber.

Though the assessee had denied maintenance of any stock register, the same was unearthed from the secret cavity. The alpha-numeric secret code mentioned on each item had the actual sale price embedded in it and the team is working on cracking the code. Two hard-disks and pen-drive were also found from the secret cavity containing details of various items in coded form, along with the photographs of the items. The concealed incriminating data maintained by the assessee in Jewels Prime Software has been retrieved by the search team. A perusal of these incriminating documents / data and the regular books of account revealed that the assessee had been suppressing the sales consideration ranging from 100 per cent to 150 per cent on the items sold to foreign tourists.

The Jeweller group had also advanced unaccounted cash loans to various persons amounting to Rs 122.67 crore and is also earning unaccounted interest on the same. The group had also introduced its unaccounted cash income through the bank accounts of their employees and karigars. To sum up, total unaccounted transactions amounting to Rs. 525 crore have been detected, so far, in the group. 

The third group is a famous builder and developer of Jaipur involved in the development of Commercial Centres, Farm Houses, Townships and Residential enclaves. The search operation has revealed that the assessee group had taken over a real-estate project at the Airport Plaza by showing an investment of Rs 1 lakh only in the books of account whereas, the WIP pertaining to the project, reflected in the balance sheet was found to be about Rs 133 crore. The search also revealed that substantial income from various affordable housing schemes run by the assessee had not been disclosed in the returns of income, the complete documents of which were seized from the searched premises. The group had also advanced unaccounted cash loans to various persons amounting to Rs 19 crore and is also earning unaccounted interest on the same. Thus, total unaccounted transactions amounting to Rs 225 crore have been detected, so far. 

In total, unaccounted and unrecorded transactions exceeding Rs 1400 crore have been unearthed due to the search and seizure operation conducted on these 3 groups.

The search operations are still continuing and further investigations are under progress.

The Income Tax Department also carried out search and survey operations on 12the January in the cases of leading builders located in Borivali-Mira Road-Bhayander Area of Thane in Maharashtra.

Details:

The search action has resulted in the seizure of unaccounted cash of Rs 10.16 crore. The total unaccounted income of earlier years detected during the search operation is Rs 520.56 crore including the cash seized. The unaccounted income inter alia includes on-money on sale of land and flats; accommodation entries of non-genuine unsecured loans routed through certain shell/paper companies; unaccounted cash receipts in the nature of capital introduction/cash loan; unaccounted cash expenses etc.

Further, the unrecognized sales revenue of Rs 514.84 crore for FY 2019-20 has been accepted by the group during the search action. Accordingly, the group has agreed to pay Self Assessment Tax on the same.

Lockers found during the course of search operation are yet to be operated. Further investigations are in progress.

#Jaipur #Thane #IncomeTaxDepartment
22-January-2021
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Income Tax Department conducts searches on two Kolkata based groups

 

The Income Tax Department has conducted search and seizure operations on two Kolkata-based Groups engaged in manufacturing and trading of Steel, trading of marbles and stones, food grains etc.

The search operation has resulted in the unearthing of incriminating pieces of evidence revealing various shell entities being used for raising bogus share capital/unsecured loans, discrepancies in stock and out of the books cash transactions. The Groups have accepted that they used paper/shell companies to route back their own unaccounted money. Total concealment of income amounting to Rs 178 crore has been detected so far including excess stock of Rs 38 crore, a release issued by the Ministry of Finance said.

Unaccounted cash of Rs 1 crore and jewellery worth Rs 1.42 crore have been seized.

Further investigations are in progress.

#Kolkata #IncomeTaxDepartment
01-January-2021
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Income Tax Department conducts searches in Guwahati

 

The Income Tax Department started a Search and Survey action on 22nd December 2020 in the cases of three leading contractors of North-Eastern India. One of the groups is also into the Hospitality business. The Search and Survey actions are being carried out at 14 locations in Guwahati, Delhi, Silapathar and Pathsala (Assam).

A release issued by the Ministry of Finance stated that the main allegations against the three groups are that they have taken accommodation entries in the form of non-genuine unsecured loans and also securities premium from dubious Kolkata-based shell companies. The three groups have suppressed their net profits across the years and routed back into business the unaccounted income through entry operators based out of Guwahati and Kolkata.

During the course of Search actions, it has been established that the shell companies from which loans/ premium had been taken exist only on paper and have no real business and creditworthiness. The entry operators,  on being questioned, have admitted that the unsecured loans/share premium from the shell companies to the groups are non-genuine and bogus. Pieces of evidence of the cash trail of routing of funds through Securities premium was unearthed during the search. It was found that amounts to the tune of about Rs 65 crore were routed back into regular books involving Shell companies which actually represent unaccounted income of the group. Further investigation is on to detect the actual quantum involved in tax evasion using this modus operandi.

It has been gathered during the Search action that one of the groups engages in huge cash transactions in the hospitality business of proportions as high as 50 per cent, which is under examination. It has been further gathered that some of the entities of the groups engage in purchases of Jewellery in cash. The source of cash purchases is under examination.

Till now, Jewellery to the tune of Rs 9.79 lakh has been seized. The sources of acquisition of remaining Jewellery found exceeding Rs 2 crore are under verification. Cash of Rs 2.95 crore has also been seized. Overall, undisclosed income to the tune of approximately Rs 100 crore has been unearthed so far during the Search and Survey operation. One locker has been found, which is yet to be operated.

Further investigations are under progress.

#Guwahati #IncomeTaxDepartment
26-December-2020