IT Department conducts searches on Pharmaceutical Manufacturers and Distributors in Haryana and Delhi-NCR

The Income Tax Department carried out search and seizure operations on 29.06.2022 on a group engaged in the business of manufacturing and distribution of Pharmaceutical medicines and Real Estate Development. The search action covered 25 premises in Delhi-NCR and Haryana.

There have been numerous incriminating documents discovered and seized, including digital data and loose sheets of paper. These records demonstrate that the group engaged in significant cash sales of pharmaceuticals that were not recorded. It was also discovered that a significant number of purchases, payroll payments, and other expenses were done in cash.

A major individual participating in such transactions has acknowledged the operational operandi of unaccounted cash sales of pharmaceutical medications, including cash receipts through hawala for sale of medicines to Afghanistan. According to a preliminary review of the data that was recovered, the approximate value of these hawala cash receipts is Rs.25 crore. Surplus stock worth Rs.94 crore has been discovered at one pharmaceutical company that deals in Active Pharmaceutical Ingredients (API).

It is also discovered that the money obtained from unaccounted cash sales was used to buy real estate and expand the facilities used to make pharmaceutical drugs. It has been discovered that the group’s real estate firms are buying and selling properties off-book and using cash. In order to reduce the capital gains realised from such real estate transactions, the group has also been claiming fictitious Long Term/Short Term Capital Losses in the securities market. Such fictitious losses are thought to total over 20 crore rupees. According to the search operation, the group has also formed benami corporations to buy real estate in the State of Himachal Pradesh.