Two jewellers get 6-month in jail for tax evasion

In 2018, the Income-Tax (I-T) Department filed a complaint against Saloni Jewellers, Yellow Jewellers, Jitendra and Kiran, all of whom have been convicted in two separate cases registered for both the firms for not paying taxes of ₹3.91 crore and ₹52.77 lakh

Mumbai: A metropolitan magistrate court has convicted two city-based jewellery firms – Saloni Jewellers and Yellow Jewellers – and their directors for not filing income tax returns and evading taxes to the tune of around ₹4.50 crore. The directors – identified as Jitendra Fatechand Jain and Kiran Fatechand Jain – were sentenced to six months imprisonment.

Amit Munde, income-tax prosecutor, however, pointed out that the bank account statement and audit report of the companies showed that an amount of ₹12 crore was deposited in his account between November 2016 and December 2016, a period when the government had announced demonetization. The directors had no explanation for the receipt of the amount. (Image for representation)

In 2018, the Income-Tax (I-T) Department filed a complaint against Saloni Jewellers, Yellow Jewellers, Jitendra and Kiran, all of whom have been convicted in two separate cases registered for both the firms for not paying taxes of ₹3.91 crore and ₹52.77 lakh.

The department claimed that as per the audit report, Saloni Jewellers had earned a profit of ₹10.75 crore during the financial year 2014-15 and was liable to pay income tax of ₹3.91 crore, whereas Yellow Jewellers showed a profit of ₹1.53 crore and was liable to pay a tax of ₹52.77 lakh.

The I-T Department in October 2017 issued a show cause notice to the directors for non-payment of taxes. Kiran, who was deposed in the court, claimed that the profit in the said year was reduced, causing them great financial difficulty and hence they were unable to file returns and pay income tax for the financial year.

The directors further claimed that their business had suffered losses and he had taken a loan from the bank for his business. However, because of the sudden increase in the rate of interest, his business collapsed and his loan account also turned NPA.

Amit Munde, income-tax prosecutor, however, pointed out that the bank account statement and audit report of the companies showed that an amount of ₹12 crore was deposited in his account between November 2016 and December 2016, a period when the government had announced demonetization. The directors had no explanation for the receipt of the amount.

Besides, Munde also pointed out that the group owns three-fourths of other companies which also had similar cases pending against them and total tax liability against the accused was to the tune of ₹34 crore.

The court took note of the fact that the accused had deposited cash of ₹12 crore in the bank and it was admitted that their total revenue from operations was ₹136 crores. “The accused have failed to prove that the default was not intentional, wilful and caused due to financial loss,” the court observed while convicting them.