I-T raids on two liquor firms reveal undisclosed income of over ₹700 cr.
Evidence of inflated invoices for supplies of raw material found, say sources
Published - August 11, 2019 12:53 am IST - CHENNAI
The Income Tax (I-T) department has detected undisclosed income amounting to ₹700 crore from two liquor manufacturing groups in Tamil Nadu.
According to the taxmen, there was a search-and-seize operation on August 6 at one of the major producers of beer and IMFL in Tamil Nadu. A senior I-T official, who wished anonymity, said that the distillery is SNJ Distilleries Pvt. Ltd.
The search was launched in the early hours on 55 premises in various places in Tamil Nadu, including Chennai, Coimbatore, Thanjavur and also in Kerala, Andhra Pradesh and Goa. The premises included residences of the promoters, key employees and some of the suppliers of materials.
The search was based on intelligence inputs gathered over several months. The business group had been allegedly indulging in large-scale tax evasion by inflating its expenditure on material used in its production.
During the search, the teams found evidence of the modus operandi of the group which involved over-invoicing of purchase of raw material and bottles which constituted a major portion of the production cost. The suppliers received payment at the inflated value by cheque or RTGS, but paid back the excess value in cash to key confidante employees of the group.
The search teams gathered evidence of such over-invoicing and return of cash by suppliers.
The over-invoicing amounted to suppression of taxable income of almost ₹400 crore over a period of six years.
The search resulted in unearthing of evidence of similar tax evasion by another leading business group in the same industry. Consequently, the department launched search operation in the case of the second group on August 9. I-T officials said that this happened at Kals Distillery Pvt. Ltd.
About seven premises of this group in Chennai and Karaikal were covered in the second phase of the search operation. The search was still in progress and the suppression of taxable income detected in this group had been estimated to be about ₹300 crore.
Based on a tip-off during the search, the tax officers tracked down employees moving with unaccounted cash, intercepted them and recovered ₹4.5 crore from the car in which it was concealed.