The Income Tax Department carried out search and seizure operation on 09.03.2021 on various persons based in Kolkata, engaged in the business of Electrical equipment and trading of decorative lighting. The cases were developed through market intelligence and field enquiries. Search and seizure action was carried out at more than 3 premises in Kolkata in the evening of 09.03.2021.

The search action has resulted in unearthing of incriminating evidences (both physical and electronic) where prima facie it has been observed that various bank accounts are being used by these persons for squaring off trade account with Chinese exporters. These products were allegedly not imported at arm’s length price so as to have less impact of customs duty on imported products, thereby reducing the purchase price. Several unaccounted transactions have also been found pertaining to sale of electrical equipment in the domestic market. 

Preliminary enquiry has also indicated that the persons on whom search and seizure operations have been conducted are engaged in clandestine operation, wherein they receive cash, convert them into foreign exchange through individuals engaged in such conversion work (also covered) and through some bank accounts, the amount is transferred to foreign accounts of Chinese exporters who export different kinds of goods to Indian importers.  Hence, part of the purchase cost is transferred to the accounts of Chinese exporters through this mode. Various mobile and electronic devices having such communication/evidences have been seized.

Unaccounted cash in excess of ₹ 3 crore has been found, which has been seized.  In one more separate action conducted by the Department, ₹ 76 lakh has been seized.

Further investigations are in progress.

Search and seizure uncover alleged cross-border trade manipulation and unaccounted transactions leading to cash and electronic evidence seizures. Search and seizure operations in Kolkata uncovered use of multiple bank accounts to square trade accounts with Chinese exporters, alleged non-arm's-length import pricing to reduce customs duty impact, unaccounted domestic sales, and a clandestine mechanism converting cash into foreign exchange routed to foreign exporter accounts; electronic devices and substantial unaccounted cash were seized and investigations continue.