Raid at Congress MLA’s firm leads to ₹450 crore ‘undisclosed income’

I-T department said it recovered ₹8 crore "unexplained" cash and seized foreign currency worth 44 lakh

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The Income Tax Department found over ₹450 crore undisclosed income after it raided a business premises owned by Madhya Pradesh Congress MLA Nilay Daga’s family, reports said quoting officials. The searches were carried out on February 18 in 22 locations which includes Betul and Satna (in MP), Mumbai, Solapur (Maharashtra), and Kolkata.

The I-T department said it has recovered “unexplained” cash of over ₹8 crore and seized foreign currency worth 44 lakh after raiding the Soya products manufacturing group. Nine bank lockers were also found during the search, said Central Board of Direct Taxes (CBDT).

“Incriminating evidence in the form of digital media such as laptops, hard drives, pen drives have been found and seized. From the investigation so far, undisclosed income of over ₹450 crore has been detected,” the CBDT said in a statement.

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The CBDT alleged the firm has introduced unaccounted income to the tune of ₹259 crore by way of introduction of share capital at huge premium from Kolkata-based shell companies. It has also introduced undisclosed income of ₹90 crore by way of sale of paper investments in shell companies to another set of shell companies of Kolkata, said the officials.

The CBDT, which frames policy for the tax department, claimed 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, it said.

“During the search, it was seen that bogus loss to the tune of ₹52 crore has been claimed by the group to suppress their profits, by indulging in intra-group out-of-exchange contract settlement,” it said. The CBDT said various companies were formed in employees’ name 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 group has also claimed incorrect Long Term Capital Gains (LTCG) exemption of over ₹27 crore on sale of shares of a group entity,” it said, adding that the probe found that the purchase of these shares was not genuine as group directors bought shares of this entity at the nominal value from non-existent Kolkata-based shell companies.

(With inputs from agencies)

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