The CBDT said "various digital evidences and forensic analysis have yielded email communication, establishing control and management of the company with the promoter of the group searched."
The Income Tax Department has detected unaccounted transactions of about Rs 1,500 crore and assets in a tax-haven country after raiding a Mumbai-based group involved in hospitality business and manufacturing of gutka and pan masala, the CBDT said on Monday. The official statement issued by the Central Board of Direct Taxes (CBDT) did not identify the group. However, official sources in the tax department identified it as the JMJ group promoted by businessman J M Joshi.
The development came a day after J M Joshi’s actor-businessman son Sachin Joshi was arrested by the Enforcement Directorate (ED) in a money laundering case linked to a Mumbai-based realty group. Sachin Joshi was sent to ED custody till February 18 after he was produced before a Mumbai court that hears cases filed under the Prevention of Money Laundering Act.
The CBDT, that frames policy for the tax department, said the six-day long search and survey operation against the group in multiple cities ended on February 13.
“The search action has led to detection of unaccounted transactions of around Rs 1,500 crore, so far,” the CBDT said, adding Rs 13 lakh cash found during the raids has been seized and jewellery worth Rs 7 crore recovered “put under prohibitory orders.”
“The search and seizure action has led to detection of foreign assets lying with a company registered in tax-haven British Virgin Islands with an office in Dubai and controlled and managed by the chairman of the group.” The net worth of the British Virgin Islands company is Rs 830 crore created by siphoning of funds from India, the CBDT alleged in the statement.
This fund, it claimed, has been round tripped to India in the form of share premium amounting to Rs 638 crore in the flagship companies of the group.
The CBDT said “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 British Virgin Islands 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,” it claimed. It has been found that the group has availed “bogus” deduction under section 80IC (deduction available in the case of new industrial undertaking) of the Income Tax Act to an extent of Rs 398 crore.
“The group set up two entities in Himachal Pradesh and was found to indulge in sham transactions in order to claim the aforesaid false deduction.”
It alleged that “unaccounted production of pan masala worth of Rs 247 crore at two factory premises of the group has also been detected.”
“It has also been seen that the assessee has falsely claimed deduction u/s 10AA (tax holiday for SEZs) of the Income-tax Act of an amount of Rs 63 crore in the Gandhidham (Gujarat) unit,” the statement said.