I-T dept detects tax evasion worth crores after raids on UP perfumers and real estate groups

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.

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 Samajwadi Party MLC Pushpraj alias Pampi Jain and another perfumer Fauzan Malik. 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.

CBDT said it was found that one 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."


"Evidence found in the sales and main office have revealed that the group makes 35-40% 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 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. CBDT claimed the promoters of the group had incorporated some offshore entities that were not reported in their income tax returns.