Income Tax Department carried out search operation on two prominent Asansol based groups engaged in business of iron and steel

On December 16, 2021, the Income Tax Department conducted a search and seizure operation on two important Asansol-based groups involved in the business of iron and steel goods, infrastructure, cement, poly fabs, agro-tech & food processing, and so on. The search operation included more than 30 locations throughout West Bengal.

A vast quantity of incriminating evidences, such as documents and digital data stored on SD cards, WhatsApp chats, and so on, have been discovered and seized. The search team discovered that SD cards were used to store information on a parallel set of unaccounted sales, excel sheets of actual production data, parallel tally accounts files, cash payment details to various parties, and so on.

A preliminary examination of confiscated SD cards and related data reveals that they contain undeclared funds handled by key personnel of the organisations’ directors and owners. During the fiscal year FY 20-21, prominent members of one of the groups revealed that unaccounted money totaling more than Rs. 66 crore was earned through unaccounted cash sales from its manufacturing facilities. Evidences linked to claims of spurious purchases have been discovered in various other firms, with purchases totaling Rs. 20 crore being admitted by the directors as undeclared income.

Furthermore, an examination of acquired evidence from another organisation suggests that several paper firms owned by entry operators have been employed to furnish lodging entries to its flagship concerns. These shell businesses were discovered to have funnelled the group’s unaccounted money back into their books of account under the pretence of share capital/unsecured loan. It has been confirmed, with admissions from the directors of these firms involved, that the value of such route surpasses Rs. 40 crore.

Thus, the search operation uncovered different tactics of tax fraud used by the groups, such as unaccounted cash sales, inflation of expenses through the assertion of bogus purchases, and the channelling of unaccounted funds through accommodation entries.

The search has resulted in the recovery of more than Rs.2 crore in unauthorised cash and jewellery, as well as the finding of total unaccounted income exceeding Rs. 125 crore.

More research is being conducted.