A startup has been accused of committing a $400 million fraud.

  • March 21, 2022, 11:57 a.m.

The Income-Tax Department has accused a unicorn start-up group, having an annual turnover of over 6,000 crore, of showing bogus purchases, making huge unaccounted cash expenditures, and obtaining accommodation entries amounting to about 400 crore.

The group directors have disclosed an additional income of more than 224 crore in various assessment years and offered to pay their due tax liability. During the probe, the agency also unearthed a complex "hawala" network involving some shell companies operating from Mumbai and Thane, which provided accommodation entries (bogus transactions) worth over 1,500 crore.

On March 9, the I-T Department conducted searches at 23 locations of the Pune/Thane-based group that is primarily engaged in the business of wholesale and retail of construction materials. The premises were located in Maharashtra, Karnataka, Andhra Pradesh, Uttar Pradesh, and Madhya Pradesh.

The agency gathered documentary proof showing that the group had booked bogus purchases, indulged in huge unaccounted cash expenditures, and arranged accommodation entries. It had also received huge foreign funding via the Mauritius route, by issuing shares at an exorbitantly high premium. Further inquiry into this aspect is under way.

According to the I-T Department, the "hawala" network unearthed during the investigation involved entities that existed only on paper, and they were created solely for the purpose of providing accommodation entries to various companies, to facilitate tax evasion and to evade detection of other financial irregularities.

During the searches, the agency has so far seized an unaccounted cash of ₹1 crore and jewellery worth ₹22 lakh.

Author : Rajdhani Delhi Representative

Rajdhani delhi representative

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