Six Morbi firms evade Rs 125cr tax

Rajkot: The investigation of Rajkot income tax commissionerate has unearthed a massive Rs 125-crore tax evasion by six companies of a major ceramic group of Morbi.
During the raid, the income tax sleuths unearthed a new modus operandi of maintaining parallel book of accounts using a specific software by these companies. The amount of tax evasion is expected to increase significantly as the investigation progresses.

The tax evasion has been unearthed after a seven-month long recce during which the investigators found that the company was maintaining parallel book of accounts for the past three years. Last week, the sleuths began search operation at 34 premises and surveys at four premises of the ceramic group. The business group has widespread operations across the country and is one of the biggest exporters of vitrified tiles in Morbi. The I-T department found undisclosed sale proceeds in books of account to the tune of Rs 125 crore and unexplained cash of Rs 4.89 crore seized, top sources in the department told TOI.

“During searches, we found that the companies were maintaining parallel books of accounts in a specific software, which was seized. We also found underinvoicing to the extent of 25% to 30% and this was confessed by the company employees when their statements were recorded,” sources close to the development said.

Nearly 35 computers and 50 laptops containing data of cash transactions are being cloned to extract the data and the amount of tax evasion is expected to go much high after the analysis of data is completed.

Unearthing such a big evasion in the current financial year has come a big relief to the department especially when the CBDT chairman has shot off a letter to all the chief commissioners in the county raising concerns over lowest tax collection in many years. Gujarat has been given the target of Rs 56,000 crore tax collection in current fiscal.

The department is preparing to launch prosecution proceedings against those persons found responsible under section 276 (C ) (1) and 277 (A) of I-T act. The I-T has issued orders to freeze around 30 bank lockers of the company, its promoters and several employees who are under scanner.