Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

New Delhi, 22nd April, 2019

PRESS RELEASE

Note on search conducted in NCR on a group in the Power sector

The Delhi unit of the Directorate General of Income-tax(Investigation) initiated search and seizure action on a group in NCR, Bhopal, Indore and Goa based upon credible information of large scale collection, possession and movement of unaccounted assets, a few weeks back.

CBDT had earlier issued a press note pertaining to searches conducted in MP. As some new developments have taken place, this press release is being issued pertaining to search and seizure operation carried out in NCR on 07/04/2019 on a leading Solar Power group connected in the matter.

Some of the significant transactions detected during the search operation are detailed hereunder:-

• Accommodation entries of ₹ 370 crore: During the search, a maze of shell companies used as mere conduits for providing entries to the group have been detected. Accommodation entries in the garb of bogus unsecured loans/share application money to the tune of ₹ 370 crore have been found.
• Bogus billing of ₹ 330 crore: Evidence of inflation of expenses through bogus billing to the tune of around ₹ 330 crore has been detected in the case of a power plant of the said group. The money so siphoned off was collected in USD through hawala operators.
• Unaccounted diary transactions of ₹ 240 crore: A handwritten diary containing records of out of books cash receipts to the tune of around ₹ 240 crore was seized from the office of the group. The entries therein have been admitted by the persons concerned.
• Bogus loans of ₹ 30 crore in a group company: Investigations reveal that a loan entry of ₹ 30 crore in one of the group companies was an accommodation entry arranged by an entry operator against equivalent cash.
• Over-invoicing of imports and round tripping of ₹ 252 crore: During the search, evidence was found indicating that the group grossly over-invoiced its imports from original manufacturers by re-invoicing it through a shell company of a person who is an accused in a major defence scam. The surplus so created was ploughed back in the books as FDI through another shell company of the same person.
• Unaccounted foreign investments/expenses: Enquiries reveal that the group used the services of a Dubai based operator to park unaccounted foreign remittances in overseas jurisdictions. Out of such remittances, approximately ₹ 27 crore was paid towards credit card expenses and ₹ 72 crore for purchase of a property abroad.
• Apart from the above, unaccounted payment of ₹ 9 crore towards purchase of a property has also been detected.
• Seizure of unaccounted assets of ₹ 3 crore has been made during the search.

The search action was undertaken on the basis of credible information and has led to detection of large scale tax evasion of more than ₹ 1350 crore.

(Surabhi Ahluwalia)

Commissioner of Income Tax

(Media & Technical Policy)

Official Spokesperson, CBDT.

Tax evasion exposed through coordinated search and seizure revealing shell-company schemes and cross-border fund layering. A coordinated search and seizure on a power-sector group uncovered systemic concealment of income through shell companies, accommodation entries and bogus loans, extensive bogus billing and out-of-books cash receipts, over-invoicing and round-tripping of imports, and use of foreign operators to park unaccounted remittances and purchase property abroad, with seizure of unaccounted assets and detection of large-scale tax non-compliance.