The income tax department has collected evidences that revealed that Hero MotoCorp has booked bogus purchases, made huge unaccounted cash expenditures and obtained accommodation entries, aggregating to the tune of more than Rs 1,000 crore. The department has also found over Rs 100-crore cash transactions for a farmhouse in Chhattarpur, Delhi, according to reports. Here’s what’s known so far:
Search and Seizure Operations
During March 23-26, the department carried out a search and seizure operation on various premises of Hero Motocorp as part of a tax evasion investigation. The raids were also conducted on offices and residential properties of the company’s Chairman and Managing Director Pawan Munjal.
Hero MotoCorp Statement
The company called the raids by the tax authorities as a “routine enquiry”. “We have been informed that this is a routine inquiry, which is not uncommon before the end of the financial year,” Hero MotoCorp had said in a statement on March 23.
In another statement, it said the company is a “law-abiding corporate, with robust internal financial controls” and its “financial statements are duly audited”.
What was the Outcome of the Income Tax Raids?
Officials were looking at financial documents and other business transactions of the country’s largest two-wheeler automobile manufacturer and its promoters, the reports said. The search operations, during with a large number of evidence in the form of hard copy documents and digital data were seized, covered over 40 premises spread over different locations in Delhi-NCR.
Farm House in Delhi-NCR
Munjal purchased a farmhouse in Chhattarpur where the market price of the farm house in Delhi was manipulated to save tax. And, black money was used to pay cash more than Rs 100 crore, which is a violation of Section 269 SS of I-T Act, said an ANI report quoting sources.
According to provisions in the Income Tax Act, accepting an amount of Rs 20,000 or more in cash from buyer while transacting immovable property will attract a penalty of 100 per cent.
What CBDT Says
The Central Board of Direct Taxes said issued a statement confirming the raids on the group along with a company operating chartered flights and a real estate group of Delhi-NCR, covering more than 35 premises. “Incriminating documents and digital evidence have been found and seized indicating that the expenses ostensibly shown to have been claimed towards business purposes are not fully supported by evidences,” it said.
Expenditure aggregating to over Rs 800 crore has been booked in the guise of purchase of services from a specific event management entity, it said added that the company has siphoned off money by way of layering.
The tax department’s policy-making body said that such claims towards non-business purposes are inadmissible expenditure under the provisions of the Income-tax Act.
Read all the Latest Business News and Breaking News here
Comments
0 comment