I-T department raids Gujarat diamond group, claims multi-crore tax evasion
The CBDT on Saturday said the Income Tax Department has detected tax evasion worth crores of rupees in raids on Gujarat's leading diamond manufacturer and exporter. The searches were launched on September 22 at 23 premises of the group, which is also in the tiles manufacturing business, at Surat, Navsari, Morbi, and Wankaner in Gujarat and Mumbai in Maharashtra. The raids are still underway.
Assessee sold over Rs. 95cr of diamond scrap in cash
"Primary analysis of data reveals that the assessee has made unaccounted purchase and sale of small polished diamonds of about Rs. 518 crore over the period," the CBDT added. "The data reveals that assessee has sold over Rs. 95 crore of diamond scrap in cash generated from its manufacturing activities, which remains unaccounted for and represents its income," the CBDT said in a statement.
Substantial part of purchases were made in cash
"The assessee, over these years, has accounted for the sale of about Rs. 2,742 crore of small diamonds in its books, against which, a substantial part of purchases were made in cash, but the purchase bills were taken from accommodation entry providers," it alleged.
'Unaccounted' cash, jewelry worth Rs. 1.95cr has been seized
The statement said "unaccounted" cash and jewelry worth Rs. 1.95 crore has been seized during the raids and "unaccounted" diamond stock of 8,900 carats worth Rs. 10.98 crore has been detected. "A large number of lockers belonging to the group have been identified, which have been placed under restraint and will be operated in due course," CBDT (Central Board of Direct Taxes) said.
Group was making its 'major purchases' through imports: CBDT
The policy-making body for the tax department said that the group was making its "major purchases" of rough diamonds through imports and making export sales of finished bigger diamonds through its company registered in Hongkong, which is effectively controlled and managed from India only.
Purchases worth Rs. 189cr, sale worth Rs. 1,040cr were made
"The data reveals that the assessee has made purchases of Rs. 189 crore and sale of Rs. 1,040 crore in the last two years through this entity," the CBDT said. The sale transactions of shares pertaining to the business of tiles were examined which led to the detection of Rs. 81 crore of unaccounted income, the CBDT added.
Raid teams seized papers, digital data kept at secret locations
It said the raid teams have seized papers and digital data kept at secret locations under the custody of its trusted employees, which includes proof of unaccounted purchases, sales, accommodation entries (obtaining illegal business entries in accounts) for purchases, etc for the last five years.