Fictitious book entries by M/s. PCL and M/s. Altos.

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....lhi. Results of investigation in respect of M/s. PCL/Altos revealed that M/s. PCL and M/s. Altos were giving book entries to various persons/companies. The modus operandi adopted by these concerns is given below: M/s. PCL entered into computer leasing agreement with a number of persons/companies/business concerns. Under these agreements, Altos (manufacturing concern) would sell computers to M/s.....

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....it was to make a fictious claim of depreciation and investment allowance. This will reduce the taxable income of the person/business concern. The advantage to PCL group were two fold. Firstly, it got 50% sale price as finance for a period of 36/50 months. Secondly, the so called lease rent paid over 36 to 50 months was claimed as business expenses. The arrangements are shown in the flow chart, as ....