The Income Tax Department carried out a search and seizure operation on 11.11.2021 on a group at Pune which is engaged in manufacturing of heavy machinery like excavators, cranes, concrete machinery which are used in mining, piling and port, etc. Search operation has covered around 25 locations across 7 cities in India.

During the course of the search, several incriminating documents and materials in the form of electronic data have been found and seized.  Analysis of this evidence shows that the assessee has been suppressing its profit by adopting various malpractices such as, artificial lowering of sales through credit notes, bogus claim of expenses through unsubstantiated trade payables, non-genuine claim of expenses on unused free-of-charge services, non-verifiable commission expenses to related parties, wrongful deferment of revenue and incorrect claims of depreciation, etc. In the case of related entities, evidence of cash receipts by dealers/brokers, unaccounted investment in properties and unaccounted cash loans have also been found and seized.

The search action has resulted in seizure of unaccounted cash and jewellery of ₹ 1 crore. 3 bank lockers found during the search have been placed under restraint.

The search action has led to the detection of total unaccounted income exceeding ₹ 200 crore. Out of the above, the assessee group has, so far, admitted to unaccounted income of ₹ 120 crore.

Further investigations are in progress.

Search and seizure uncover widespread tax suppression by manufacturing group, resulting in asset seizure and detection of unaccounted income. Tax search and seizure across multiple locations uncovered electronic and physical evidence showing systematic income suppression by the manufacturing group through credit note manipulation, bogus expense claims, non verifiable related party payments, wrongful revenue deferment, incorrect depreciation, and undisclosed cash receipts and investments; cash and jewellery were seized and bank lockers restrained, leading to detection of substantial unaccounted income and an admission of a portion by the group, with investigations continuing.