CHENNAI: The income tax department searched five locations in Chennai and Madurai on November 4 in a case pertaining to an IT infrastructure group based in Chennai. Unaccounted income to the tune of Rs 1,000 crore was found, an official release by the income tax department stated.
The I-T department said it unearthed evidence relating to the curious investments in a Singapore-registered company. The shareholding of the particular company was held by two others. One of them was the group which was searched by the income tax department while the other is a subsidiary of a major infrastructure development and financing group.
The I-T department said the company that was raided had a 72% shareholding despite investing a nominal amount. The rest was held by the infrastructure major despite having a major investment.
“This resulted in benefit of almost seven crore Singapore dollars, which is Rs 200 crore. This was not disclosed by the company,” it said.
“The income tax department carried out searches in five locations in Chennai and Madurai on November 4. Proceedings will be initiated under Black Money Act, 2015. The present value of the investment exceeds Rs 354 crore,” the I-T department said.
It also stated that five shell companies had been acquired by the group which were used to siphon out Rs 337 crore from the main group company by raising bogus bills and without doing any real business.
The I-T department said it found evidences regarding allotment of preference shares worth Rs.150 crore in 2009 in the group company by passing accounting entries only, to project inflated capital before banks and financial institutions to obtain finances. Allotment of another Rs 150 crore worth preference shares in 2015 from funds from group companies, who in turn took loans/entries, is being examined.
During the search, officials found that the group had borrowed funds from banks on interest and diverted to other group companies free of interest for investments in properties. The total interest disallowance on this count works out to about Rs 423 crore.
Further, the search also revealed that the group had purchased about 800 acres of land worth at least Rs. 500 crore, in the names of various shell companies from the funds provided by the main group concern. Applicability of the Prohibition of Benami Property Transactions Act, 1988 to these transactions is being examined.
The I-T department said there was transfer of substantial share holdings during the current year at a price much lower than the fair market value to be determined as per the IT Rules, 1962. In view of this, substantial additions are likely to be made under section 56(2)(x) of the IT Act, 1961(the Act) in the case of the buyer and capital gains under Section 50CA of the Act, in the hands of the seller. The quantum of this will be determined in due course.