Income Tax Department conducts search operations in Madhya Pradesh
The Income Tax Department began search and seizure operations against two significant Indore business groupings on November 25, 2021. The first group is involved in mining, media, and cable television services, while the second group runs a coaching academy. More than 70 locations in Madhya Pradesh and five other states have been searched.
Various incriminating documentary and digital evidence, as well as a parallel set of financial records for some of the enterprises, were discovered and seized during the search. A preliminary examination of these evidences reveals taxable income avoidance through a variety of schemes, including the suppression of sales in the mining industry. Similar large-scale tax avoidance has been discovered in the cable TV industry. Other malpractices such as on-money payments, alleged benami transactions, unexplained cash expenditures, concealed investment in immovable assets, and so on have also been discovered.
According to investigations, the group has also obtained accommodation entries in the form of false unsecured loans totaling more than Rs. 40 crore from various shell businesses controlled by entry operators. During the search, the main entry operator, the key handler, and many fake directors of the shell firms were identified, traced, and covered. The fake directors and key handler have stated that the firms are nothing more than fictitious entities, and that they are acting on the orders of the primary entry operator.
Documentary evidence discovered and confiscated during the coaching group’s search operation plainly demonstrates the suppression of cash collections from pupils totaling more than Rs. 25 crore. This group is also systematically hiding its royalty receipts and profit sharing income from its many franchisees, according to the analysis of seized material. On these accounts, unaccounted cash totaling more than Rs. 10 crore has been received. The search operations resulted in the seizure of Rs. 2 crore in unaccounted cash.
Further investigations are being carried out.