New Delhi, Sep 25 : Covering 23 locations in Gujarat and Maharashtra during search and seizure operations on a leading diamond exporter, the Income Tax (I-T) department on Saturday claimed that the business group indulged in unaccounted sale and purchase of small polished diamonds worth Rs 518 crore.

As per a statement issued by the department, the firm sold more than Rs 95 crore worth of diamond scrap in cash generated from its manufacturing activities which remains unaccounted for and represents its income.

“The assessee, over these years, has accounted for sale of about Rs 2,742 crore of small diamonds in its books against which substantial part of purchases were made in cash, but the purchase bills were taken from accommodation entry providers,” the Income Tax department said.

The taxmen have alleged that the diamond major made purchases of rough diamonds through imports and carried on export sales of finished bigger diamonds through its company registered in Hong Kong which is effectively controlled and managed from India only.

“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 tax department said in the statement on Saturday.

During its operations, tax department seized unaccounted cash and jewellery of Rs 1.95 crore and unaccounted diamond stock of 8,900 carat worth Rs 10.98 crore.

“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. The search operation is still continuing and further investigations are in progress,” said the statement.(UNI)