PRODUCTION COSTS FUDGED
Unaccounted income of two raided TN distilleries may be highest in country: I-T
Sivakumar.B@timesgroup.com
Chennai:06.09.2019
The unaccounted income assessed by the income tax department following seizure of several bank documents during searches in SNJ Distilleries and Kal’s Distilleries in Tamil Nadu in early August could well be the highest in the country.
The searches in the two distilleries began on August 6 in Tamil Nadu, Kerala, Karnataka and Goa and continued until August
9. A spokesman from the Central Board of Direct Taxes (CBDT) confirmed that the unaccounted income of these two distilleries was the highest so far in the country.
Efforts to reach S N Jayamurugan of SNJ distilleries proved futile. There was no response to calls and messages to Jayamurugan’s two mobile numbers on Wednesday.
I-T official said searches in SNJ distilleries resulted in the unearthing of similar tax evasion by another business group, Kal’s. Consequently, the department launched search operations in the premises of Kal’s distilleries on August 9. About seven premises of this group in Chennai and Karaikal were covered in the second phase of the search. “We did not realise that the unaccounted income from the distilleries would be so high. But after collating data from all the bank documents seized, we found that the total unaccounted income totalled several crores of rupees,” an I-T official, seeking anonymity, told TOI. “We found evidence of the modus operandi that involved over-invoicing of purchase of raw material and bottles, which constituted a major portion of the cost of production,” said the official.
Suppliers received payments by cheques at inflated value or RTGS, but paid back the excess in cash to ‘confidante’ employees. The search teams gathered evidence of such over-invoicing and return of cash. Over-invoicing led to suppression of taxable income over six years. Documents are being checked to see if the case can be filed under the Benami Transactions (Prohibition) Act, 1988.
Unaccounted income of two raided TN distilleries may be highest in country: I-T
Sivakumar.B@timesgroup.com
Chennai:06.09.2019
The unaccounted income assessed by the income tax department following seizure of several bank documents during searches in SNJ Distilleries and Kal’s Distilleries in Tamil Nadu in early August could well be the highest in the country.
The searches in the two distilleries began on August 6 in Tamil Nadu, Kerala, Karnataka and Goa and continued until August
9. A spokesman from the Central Board of Direct Taxes (CBDT) confirmed that the unaccounted income of these two distilleries was the highest so far in the country.
Efforts to reach S N Jayamurugan of SNJ distilleries proved futile. There was no response to calls and messages to Jayamurugan’s two mobile numbers on Wednesday.
I-T official said searches in SNJ distilleries resulted in the unearthing of similar tax evasion by another business group, Kal’s. Consequently, the department launched search operations in the premises of Kal’s distilleries on August 9. About seven premises of this group in Chennai and Karaikal were covered in the second phase of the search. “We did not realise that the unaccounted income from the distilleries would be so high. But after collating data from all the bank documents seized, we found that the total unaccounted income totalled several crores of rupees,” an I-T official, seeking anonymity, told TOI. “We found evidence of the modus operandi that involved over-invoicing of purchase of raw material and bottles, which constituted a major portion of the cost of production,” said the official.
Suppliers received payments by cheques at inflated value or RTGS, but paid back the excess in cash to ‘confidante’ employees. The search teams gathered evidence of such over-invoicing and return of cash. Over-invoicing led to suppression of taxable income over six years. Documents are being checked to see if the case can be filed under the Benami Transactions (Prohibition) Act, 1988.
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