The Income Tax Department initiated a search and seizure operation on a prominent Kolkata-based Group, engaged in manufacturing of TMT Bars and structural construction materials etc. on 01.12.2021.  The search action covered more than 20 premises spread over West Bengal and Odisha.

The action unearthed various methods of tax evasion adopted by the group. A large number of incriminating evidences in the form of documents and digital data demonstrating high value unaccounted cash payments, unaccounted cash purchase and sales, suppression of production, etc. have been found and seized. A preliminary analysis of these evidences reveals that many paper/shell companies are run by the group to provide accommodation entries to its flagship concerns. These shell entities were found to have routed back their unaccounted money in the guise of share capital/unsecured loan into books of account. Such modus operandi has been admitted by one of the key persons of the group.

The search action has resulted in seizure of unaccounted cash of ₹ 75 lakh and jewellery valued at ₹ 2.26 crore while certain bank lockers have been placed under restraint. The search action, so far, has led to the detection of total unaccounted income of around ₹ 100 crore.    

Further investigations are under progress.

Tax search and seizure uncovers accommodation entries via shell companies, exposing routed unaccounted funds and ongoing probe. A tax search and seizure operation of a Kolkata-based manufacturing and construction group uncovered documentary and digital evidence of systematic tax evasion, including unaccounted cash receipts and payments, suppression of production, and the use of paper or shell companies to provide accommodation entries; funds were allegedly routed back as share capital or unsecured loans, a practice admitted by a key person, and seizures and restraints have been effected while investigations continue.