The income tax department has found irregularities and undisclosed income of about ₹450 crore during search and seizure operations at 22 premises of a Betul-based soya products group owned by Congress MLA in Madhya Pradesh, Nilay Daga and his brothers at Betul and Satna in Madhya Pradesh, Mumbai and Solapur in Maharashtra and Kolkata.
The search operations that began on Thursday ended on Sunday.
“During the course of the search operation, unexplained cash of over ₹8 crore and unexplained foreign currency of various countries amounting to more than Rs. 44 lakh have been seized. 9 bank lockers have also been found during the search,” the IT department said in a statement without naming Daga.
"We received information about tax evasion through the formation of shell companies to convert unaccounted money into accounted ones. The information was found correct and we found huge irregularities during the searches," said a senior officer of the IT department who confirmed that Daga’s premises had been searched.
The bank lockers found in Betul and Solapur during the searches will be opened on Tuesday, said the officer.
“The group has also introduced undisclosed income of ₹90 crore in its books of accounts by way of sale of paper investments in shell companies to another set of shell companies of Kolkata. None of the companies was found to be operational at their shown address and the group could not confirm the identity of such paper companies or any of its Directors. Many of these paper companies were found to be struck off by the Ministry of Corporate Affairs,” the statement said.
{{/usCountry}}“The group has also introduced undisclosed income of ₹90 crore in its books of accounts by way of sale of paper investments in shell companies to another set of shell companies of Kolkata. None of the companies was found to be operational at their shown address and the group could not confirm the identity of such paper companies or any of its Directors. Many of these paper companies were found to be struck off by the Ministry of Corporate Affairs,” the statement said.
{{/usCountry}}During the search, officials found that the group showed a loss of ₹52 crore to suppress their profits by indulging in intra-group out-of-exchange contract settlement.
Various companies were formed in the name of employees to carry out these transactions, while there was no actual business carried out between them. Directors of these companies were not aware about any such transactions, the statement said.
“The group has also claimed incorrect Long Term Capital Gains exemption of over ₹27 crore on sale of shares of a group entity. Investigations revealed that the purchase of these shares was not genuine as group directors purchased shares of this entity at nominal value from non-existent Kolkata-based shell companies. Various types of evidence including chats among key persons of the group reflects unexplained cash payment and hawala transactions of over ₹15 crore,” the statement said.
“Incriminating evidence in the form of digital media such as laptops, hard drives, pen drives etc have been found and seized. From the investigation so far, undisclosed income over Rs. 450 crore has been detected,” it said.
Daga, who reached Bhopal on Monday to attend the budget session of the legislative assembly, could not be contacted despite repeated attempts.