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IT Dept raids on textile group reveals black money

Sep 24, 2021
IT Dept raids on textile group reveals black money

The CBDT on Tuesday claimed that the Income Tax Department has detected black money worth crores stashed abroad after it raided a leading business group involved in manufacture of textile and filament yarn.

The searches that were launched on September 18, 2021 are continuing at the premises of the group including its corporate offices in Delhi, Punjab and Kolkata. The Central Board of Direct Taxes (CBDT) claimed in a statement, that, the group has maintained unaccounted funds of about Rs 3.50 billion in its foreign bank accounts and has also routed these funds back into its business through shell entities in tax havens.

The modus operandi detected was related to investment by foreign entities, under control of the group, in foreign currency convertible bonds, issued by its main concern, and subsequently under the garb of defaulting on payments, converting it into shares of the company.

The CBDT said that foreign companies and trusts were being paid management fees for managing the unaccounted funds. Though there is a specific requirement of disclosing foreign assets owned/managed in the form of companies and bank accounts in schedule FA in Income Tax Returns, the same has not been disclosed by the group to the department.

The statement said the department has gathered "evidence" that cash of about Rs 100 crore was generated by debiting "bogus expenditure" in company accounts and cash transactions in land deals.

Source: Business Standard

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