Income-tax officials raid engineering company
The income tax (I-T) authorities conducted searches (raids) on Patel Engineering Ltd, a listed firm that is mainly into construction of bridges, dams and highways, and found that it had shown artificial expenditure of about Rs 18 crore to conceal actual profit.mumbai Updated: Dec 17, 2010 02:51 IST
The income tax (I-T) authorities conducted searches (raids) on Patel Engineering Ltd, a listed firm that is mainly into construction of bridges, dams and highways, and found that it had shown artificial expenditure of about Rs 18 crore to conceal actual profit.
The company had shown artificial expenditure in making payments for subcontracts awarded by it to other firms and in purchases of various machineries and equipment.
BP Gaur, director general (Investigation), Income Tax, Mumbai, confirmed searches on the company.
Another I-T officer, requesting anonymity because he is not authorised to speak to the media, said 20 premises in Mumbai and five in Hyderabad, Kolkata, Bangalore and Buldhana were searched.
The searches, in which more than 125 officers and staff took part, began in the morning and are likely to continue till Friday.
The officer said that during searches details of 12 bank lockers were found which have been sealed. “These lockers would be opened next week and then we would know what all it has,” the officer said.
The search team also found jewellery estimated to be worth around Rs 1 crore. The department has not seized the jewellery as its valuation is yet to be done by an official valuer.
“After valuation, we would check with records if the same is declared,” the officer said.
He added if it is found that the jewellery is not declared, it would be seized.
Rupen Patel, managing director of the company, Pravin Patel, non-executive chairman and K Kannan, independent director could not be reached for comment as the searches were on.
The I-T team also found a benami bank account.
“We found that the account was in the name of an employee of the company but was under control and operated by the company owners,” the officer said.
He added that the account would be checked on Monday.
About artificial expenditure in payment for sub contracts, the officer said the company used to show excess payment, in records, to the firm (taking sub contract).
“The firm taking sub contract was also paid excess amount by cheque, but a part of it (which was excess) came back to company in cash,” the officer said.