Income Tax Raids Expose Over Rs 1,000 Crore Tax Evasion at Refex Group

During a search operation at the premises of a private company named Refex Group and its Associates, the income tax department discovered that the company was involved in a tax evasion worth over Rs 1,000 crore and also found unexplained investments of Rs 250 crore.

The income tax department, Chennai, carried out searches on Tuesday, where the Group’s flagship firm, Refex Industries, was targeted along with several other related parties. Refex Industries is engaged in refrigerant gases, coal ash handling, power trading, and solar energy. The searches covered the financiers, alleged hawala operators, and jewellery businesses connected to the promoters.

As per the Income Tax Officials, the search also discovered large-scale bogus purchasing transactions amounting to Rs 1,112 crore, which are mainly connected to the purchase of Coal and ash-handling contracts. They also found that Refex Industries received Rs 382.68 crore as equity investment from 53 people and entities. Out of these, 15 had not filed their return, and 37 had not reported the transactions in their income tax return. Many of the investors were the employees or associates of the promoters, which raised doubts that the money was unexplained and was channelled through benami entities.

Further, the investigation also discovered that the promoter created fake companies under the name of his driver. The promoter allegedly routed Rs 8.5 Crore cash deposits and transactions of over Rs 200 Crore. He was allegedly involved in purchasing a private jet worth Rs 37 crore, luxury cars worth Rs 10 crore, and expensive watches worth over Rs 4 crore.

During the search, the officials seized some of the documents of the company, which suggested that the group had made an investment of US$30 million in the Swiss Pharma Firm Astro Viz. The officials are now investigating the source of this investment. Additionally, the investigators also found that the company had invested Rs 115 crore in DN Energy Ltd, which was immediately diverted.

The officials also conducted searches on the financier Rajesh Surana, who allegedly advanced Rs 312 crore to Arandhya Infra, which lent these funds. The investigators are also analysing the role of hawala operators who helped in routing the funds through the non-banking channels. As of now, the department has found Rs 1,000 crore in unexplained income and Rs 70 crore in unexplained cash, gold and silver. The investigation is still ongoing.