Continuing with the searches, the income tax (I-T) authorities, on Friday, checked the record of payments made by diamond company -- Rosy Blue -- to the workers involved in cutting, assorting and polishing of diamonds.
According to I-T authorities, the company purportedly showed excess payments towards labour to inflate the expenses and show reduced profit, thus concealing the actual income. The I-T officials said that the company also showed more number of workers, than what they hired and they suspect that the excess payment made to the contractor supplying workers was returned in cash. "We will be getting in touch with the contractors to check their finance records," said an I-T official requesting anonymity.
On Thursday and Friday, the investigation wing of the I-T department conducted searches on over 20 premises belonging to Rosy Blue - in Mumbai, Surat, Indore and Lucknow -- and its group company B Arunkumar, their owners and senior officials. While the company has its main office in Mumbai, its factories are located in Surat and Indore. The authorities also sealed 20 bank and private lockers belonging to the company owners and their family members.
While refraining from showing a part of the diamond stock in the record books, the company under valued the sale of diamonds and jewellery, said the I-T officials. "We have found under valuation in the records of the company's unit in SEEPZ too," the official added.
The I-T, however, did not get any voluntary admission of concealment of income from the company. The authorities were waiting to speak to Dilip Mehta, chief executive officer of the company, who operates from Dubai and has details about the company affairs. "Once we speak to him, we would be able to reach the concealment figure," the I-T official said.
As per the list provided by the German authorities, the owners of Rosy Blue had figured among the individuals having accounts in LGT bank of European tax haven Liechtenstein.