The Income Tax department detected alleged stock manipulation, fudging of account books and tax evasion worth crores of rupees after it recently raided two Uttar Pradesh-based perfume manufacturing and real estate groups including that of Samajwadi Party MLC Pushpraj alias Pampi Jain.
The searches were carried out on December 31 at over 40 premises in Maharashtra, Delhi, Tamil Nadu, Gujarat and at some places in Uttar Pradesh, including Kannauj where Jain resides.
While a statement issued by the Central Board of Direct Taxes (CBDT), the policy-making body for the tax department, did not name any entity, sources said they were linked to Jain and another perfumer Fauzan Malik.
In the case of Jain, the CBDT said it was found that the group was “involved in tax evasion by under-reporting sales of perfumes, stock manipulation, fudging books of account to shift profits from taxable unit to tax exempt unit, inflation of expenditure, etc.” “Evidences found in the sales office and main office have revealed that the group makes 35-40 per cent of its retail sales in cash by ‘kucha’ bills and these cash receipts are not recorded in the regular books of account, running into crores of rupees,” it claimed.
The Samajwadi Party, on the day of the raids, had said that the I-T action was an “open misuse of central agencies by a scared BJP” ahead of the upcoming Uttar Pradesh Assembly polls.
SP president Akhilesh Yadav had recently launched a perfume called ‘Samajwadi ittra’ prepared by Jain in the run-up to the elections.
Countering these claims, Union Finance Minister Nirmala Sitharaman had said that the agencies were undertaking the action after they got “actionable intelligence.” In its statement, the CBDT said that “evidence” of booking purchases from bogus parties to the extent of about ₹ 5 crore have also been unearthed.
The analysis of the “incriminating” evidence indicates that “unaccounted” income so generated is invested in various real estate projects in Mumbai, acquisition of properties both in India and the United Arab Emirates (UAE), it said.
“It has also been detected that the group has evaded tax of ₹ 10 crore on conversion of the stock-in-trade to capital as corresponding income has not been declared.