The Income Tax department said in an official statement on Sunday that it has conducted a search and seizure operation on a Maharashtra-based unicorn start-up group that is mainly engaged in wholesale and retail construction material. The group, the department added, has a presence across the country and has annual turnover of more than Rs. 6,000 crore.
Preliminary analysis showed that the total quantum of accommodation entries allegedly provided by these shell entities exceeds Rs. 1,500 crore, the department said. According to the statement, unaccounted cash of Rs. one crore and jewellery worth Rs. 22 lakh have been seized. Further investigations are on, the department said.
A person aware of the development, on condition of anonymity, said the unicorn mentioned by the I-T department is Infra.Market.
When reached out for a comment, a spokesperson for infra.market said, "As per our company policy, we ensure adherence to the applicable tax laws, at all times." "We continue to work with the department to solve all their queries related to any transaction. Since the investigation is still ongoing we will wait for the final report to comment further," the spokesperson added.
The operation, held on 9 March, covered 23 premises across Maharashtra, Karnataka, Andhra Pradesh, Uttar Pradesh and Madhya Pradesh. The group is based in Pune and Thane. Incriminating evidence in the form of documents and digital data have been found and have been seized during the search, the department added.
It showed that the group allegedly booked bogus purchases, made huge unaccounted cash expenditure and obtained accommodation entries, totalling over Rs. 400 crores, the statement said. Accommodation entries are bogus transactions.
Directors of the group have admitted to this modus operandi and disclosed additional income of more than Rs. 224 crore in various assessment years, and consequently offered to pay their due tax liability, the statement said. The search also showed that the group had obtained huge foreign funding through the Mauritius route, by issuing shares at exorbitantly high premium, the department alleged in the statement.
During the search operation, a hawala network of some Mumbai and Thane based shell companies, was also unearthed, the tax department said. These shell companies exist on paper, and were allegedly created only for the purpose of providing accommodation entries.
