After a series of search and seizure operations on 50 properties in several states, the income tax department of Jharkhand was able to seize Rs 2 crore in cash, Rs 100 crore in unaccounted investments/transactions, and a total of 16 bank vaults have been restrained.
On November 4, 2022, these raids were conducted against a few commercial organisations involved in the selling and transportation of coal, the performance of civil contracts, the mining of iron ore, and the manufacturing of sponge iron. Two politically exposed individuals and their connections were among those who were searched.
More than 50 locations throughout Ranchi, Godda, Bermo, Dumka, Jamshedpur, Chaibasa, Patna, Gurugram, and Kolkata were investigated. The search operation resulted in the discovery of a significant incriminating documents and digital evidences. According to a preliminary study of this data, these organisations have used a variety of methods for evading taxes, such as inflating costs, making cash loans, receiving payments in cash, and suppressing production. Additionally, it was discovered throughout the search that investments in immovable property had been made, the source of which could not be adequately explained.
According to the statement of the Central Board of Direct Taxes (CBDT), the search operation also revealed that one of the groups engaged in civil contracts was not maintaining regular books of account. The group has been inflating its expenses by entering into non-genuine transactions of purchase of raw material/ sub-contract expenses in lump sum at the fag end of the year. Evidence seized also suggested that unfair payments in cash had been made to secure contracts.
The CBDT statement stated in the case of the other group engaged in coal trading/ extraction of iron ore, etc, unaccounted stock of iron ore of huge value has been found, which is yet be quantified. The said group has also introduced its unaccounted money in the form of unsecured loans and share capital by layering the transactions through shell companies.
According to the statement, professionals connected to this group acknowledged that they had signed the audit report created by the organization’s accountant without carrying out any due diligence and without verifying any supporting documentation.
Additionally, it was stated in the CBDT announcement that other investigations were ongoing.