New Delhi, Sep 21: Carrying out a search and seizure operations on a leading textile company, the Income Tax (I-T) department has claimed that the firm had hidden Rs 350 crore in foreign banks and also routed these funds back into its business through shell entities in tax havens.
The search and seizure operations covered the company’s offices in Punjab, Delhi, and West Bengal.
“The modus operandi detected was related to investment by foreign entities, under control of the group, in Foreign Currency Convertible Bonds (FCCB), issued by its main concern, and subsequently under the garb of defaulting on payments, converting it into shares of the company,” the tax department said.
The tax department said that it had noticed 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,” it said in a statement.
The official statement said that the company under scanner generated cash of about Rs 100 crore by debiting bogus expenditure in company accounts and cash transactions in land deals. (UNI)