For support, write to us on: admin@taxsutra.com
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
PRESS RELEASE
Income Tax Department conducts pan-India searches in case of mobile manufacturing companies
The Income Tax Department carried out search and seizure operationspan-India on 21.12.2021in the case of certain foreign controlled Mobile Communication & Mobile Hand-set Manufacturing Companies and their associated persons. Various premises in the states of Karnataka, Tamil Nadu, Assam, West Bengal, Andhra Pradesh, Madhya Pradesh, Gujarat, Maharashtra, Bihar, Rajasthan, Delhi & NCR have been covered in the action.
The search action has revealed that two major companies have made remittance in the nature of royalty, to and on behalf of its group companies located abroad, which aggregates to more than Rs.5500 crore. The claim of such expenses does not seem to be appropriate in light of the facts and evidence gathered during the search action.
The search operation has also brought out the modus operandi of purchase of the components for manufacturing of mobile handsets. It is gathered that both these companies had not complied with the regulatory mandate prescribed under the Income-tax Act, 1961 for disclosure of transactions with associated enterprises. Such lapse makes them liable for penal action under the Income-tax Act, 1961, the quantum of which could be in the range of more than Rs.1000crore.
The search has brought to fore another modus operandi whereby foreign funds have been introduced in the books of the Indian company but it transpires that the source from which such funds have been received are of doubtful nature, purportedly with no credit worthiness of the lender. The quantum of such borrowings is about Rs.5000 crore, on which interest expenses have also been claimed.
Evidence with regard to the inflation of expenses, payments on behalf of the associated enterprises, etc. have also been noticed which led to the reduction of taxable profits of the Indian mobile handset manufacturing company. Such amount could be in excess of Rs.1400 crore.
It is further found that one of the companies utilized the services of another entity located in India but did not comply with the provisions of tax deduction at source introduced w.e.f. 01.04.2020. The quantum of liability of TDS on this account could be around Rs.300 crore.
In case of another company covered in the search action, it has been detected that the control of the affairs of the company was substantively managed from a neighbouring country. The Indian directors of the said company admitted that they had no role in the management of the company and lent their names for directorship for namesake purposes. Evidences have been gathered on attempt to transfer the entire reserves of the company to the tune of Rs.42 crore out of India, without payment of due taxes.
Survey action in the case of certain fintech and software services companies have revealed that a number of such companies have been created for the purposes of inflating expenses and siphoning out of funds. For this purpose, such companies have made payments for unrelated business purposes as also utilized the bills issued by a Tamil Nadu based non-existent business concern. The quantum of such out-flow is found to be around Rs.50 crore.
Further investigations are in progress.
(SurabhiAhluwalia)
Commissioner of Income Tax
(Media & Technical Policy)
Official Spokesperson, CBDT
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
PRESS RELEASE
5.89 crore Income Tax Returns filed on the new e-filing portal of the Income Tax Department as on 31st December, 2021
The Income Tax Department extends New Year greetings to everyone. We also express our gratitude to taxpayers for filing their Income Tax Returns in time.
Nearly 5.89 crore Income Tax Returns (ITRs) have been filed on the new e-filing portal of the Income Tax Department as on 31st December, 2021, the extended due date. More than 46.11 lakh ITRs were filed on 31.12.2021. In order to assist taxpayers with a smooth experience on the portal, 16,850 taxpayer calls and 1,467 chats were responded to by the helpdesk. In addition, the Department has been proactively engaging with and reaching out to taxpayers and professionals for assistance on its official Twitter handle. On 31st December, 2021 alone, more than 230 Tweets from taxpayers and professionals were responded to.
Out of 5.89 crore ITRs filed for AY 2021-22 as on 31st December, 49.6% of these are ITR1 (2.92 crore), 9.3% are ITR2 (54.8 lakh), 12.1% are ITR3 (71.05 lakh), 27.2% are ITR4 (1.60 crore), 1.3% are ITR5 (7.66 lakh), ITR6 (2.58 lakh) and ITR7 (0.67 lakh). Over 45.7% of these ITRs have been filed using the online ITR form on the portal and the balance have been uploaded using the ITR created from the offline software utilities.
In comparison, as on 10th January, 2021 (the extended due date for ITRs for AY 2020-21), the total number of ITRs filed was 5.95 crore with 31.05 lakh ITRs filed on the last day ie on 10th January, 2021 as against over 46.11 lakh ITRs filed on the last day this year.
The Department gratefully acknowledges the contribution of the taxpayers, Tax Practitioners, Tax Professionals and others who have made this possible. We reiterate our resolve to work tirelessly to ensure a smooth & stable taxpayer service experience to all.
(Surabhi Ahluwalia)
Commissioner of Income Tax
(Media & Technical Policy)
Official Spokesperson, CBDT
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
New Delhi, 29th December, 2021
PRESS RELEASE
Income Tax Department conducts searches in Chhattisgarh
The Income Tax Department carried out search and seizure operations on 22.12.2021 on two prominent groups of Raipur and Korba, engaged in the business of manufacturing of iron & steel products, coal washery and transportation, etc. The search action covered more than 35 premises spread over Raipur, Korba, Bilaspur and Raigarh districts of Chhattisgarh.
During the course of the search action, in one of the groups, various incriminating documents and digital evidences have been found and seized including a parallel set of cash books. The preliminary analysis of these parallel set of cash books reveals that it contains a systematic record of unaccounted transactions of more than Rs. 200 crore. Evidences collected also suggest that certain entities of this group have been found to be indulging in suppression of actual production and subsequent unaccounted sales made in cash, which are not recorded in the regular books of account. In the case of one such entity, parallel set of books of account evidencing transactions of about Rs.50 crore, which are not reflected in the regular books of account, have been found and seized. The search team has also found that this group is evading their taxable income by obtaining bogus purchase invoices from related group entities engaged in transportation as well as from entry providers.
The analysis of incriminating documents and other related evidences in the case of another group clearly indicates that this group has indulged in various malpractices to evade taxes on its income by resorting to obtaining of share capital with unsubstantiated share premium and claim of expenses on bogus purchases. The key person of this group has admitted an undisclosed income of Rs.20 crore.
So far, the search action has led to the seizure of unexplained cash and jewellery of more than Rs. 3 crore.
Further investigations are in progress.
(Surabhi Ahluwalia)
Commissioner of Income Tax
(Media & Technical Policy)
Official Spokesperson, CBDT
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
PRESS RELEASE
Income Tax Department conducts searchesin Rajasthan
The Income Tax Department carried out search and seizure operationson 22.12.2021 on two groups and their business entities. One group is engaged in the business of manufacturing electrical switches, wires, LEDs, real estate and hotel business in Rajasthan, Maharashtra and Uttarakhand whereas, the other group is engaged in money lending business in Jaipur and nearby cities. The search action has covered more than 50 premises spread over various locations including Jaipur, Mumbai, and Haridwar.
A large number of incriminating documents and digital data have been found and seized during the search action.
A preliminary analysis of seized evidence reveals that several entities, engaged in the business of manufacturing switches, wires, LEDs, etc., have been selling such goods which are not recorded in the regular books of account. During the investigation, it was also noticed that they were claiming bogus expenses to reduce taxable income. The trail of receipt of cash component on unaccounted sale of goods has also been found. In the case of this group, the search team has detected transactions evidencing undisclosed income of more than Rs.150 crore. The key person of the group has admitted Rs.55 crore as undisclosed income and has offered to pay tax thereon.
The analysis of seized and other related documents relating to the other group has revealed that most of the loans are given in cash and a relatively high rate of interest has been charged on these loans. Neither the loans advanced nor the interest income earned thereon, have been disclosed in the returns of income of the persons engaged in this business. Evidence relating to undisclosed income of more than Rs.150 crore has been detected in this group.
The search action, so far, has resulted in total seizure of unaccounted cash and jewellery worth Rs.17 crore.
Further investigations are in progress.
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
PRESS RELEASE
Income Tax Department conducts searchesin Maharashtra
The Income Tax Department carried out search and seizure operationson 22.12.2021on two business groups of Nandurbar and Dhule districts of Maharashtra. These groups are engaged in the business of civil construction and land development. The search operation covered more than 25 premises spread across Nanndurbar, Dhule and Nashik.
During the search and seizure operation many incriminating documents, loose papers, and digital evidences have been found and seized.
In the case of entities belonging to the first group, the seized documents clearly reveal that they have resorted to large-scale suppression of taxable income by inflating their expenses, primarily by way of the claim of non-genuine sub-contract expenses and unverifiable old sundry creditors. The search team has detected that these subcontracts have been awarded to family members and their employees who have not rendered services in this regard. Evidence has also been gathered about unrecorded expenses incurred in cash. The preliminary investigation indicates that this group has evaded income to the extent of Rs. 150 crore on account of the above malpractices.
In the case of the land developers, it has been found that a substantial part of the land transactions have been carried out in cash which are not accounted for in the regular books of account. Further, incriminating documents evidencing receipt of ‘on-money’ on land transactions and cash loans exceeding Rs. 52 crore have been found and seized.
The search action has, so far, resulted in the seizure of unaccounted cash of more than Rs. 5 crore and jewellery valued at Rs.5 crore.
Further investigations are in progress.