IT department detects Rs 130-cr after raids on Punjab-based cycle, student immigration businesses

The Income Tax Department detected undisclosed income of about Rs 130 crore after it recently raided two Punjab-based businesses, one engaged in cycle trade and the other in providing immigration and visa services to students, the CBDT said on Tuesday. Searches on the entity engaged in cycle trade were carried out on October 21.

"The action led to detection of unaccounted income of about Rs 150 crore," the Central Board of Direct Taxes (CBDT), which frames policy for the tax department, said in a statement.

Unaccounted cash of Rs 2.25 crore and gold worth Rs 2 crore were also seized during these raids, it said.


"The group has been found to be involved in suppression of income by showing bogus intra-group transactions within group concerns," the CBDT said, adding that "the group was also found to have been involved in receiving a substantial part of sale consideration in cash and thereby, suppressing the turnover".

The "seized documents" reveal suppression of turnover of around Rs 90 crore per annum by a group concerned of the cycle business, and "incriminating" documents related to the undisclosed sale of scrap were also seized.

The second group is based in Jalandhar and is engaged in providing immigration and study visa-related services to students.

Raids on this group were carried out on October 18.

"The searches found that the group used to charge a package, ranging between Rs 10 lakh to Rs 15 lakh per student, depending on the country where the student wished to pursue education," the CBDT said.

"Almost the entire receipts of the group, aggregating to more than Rs 200 crore in the last five years are in cash," it said.

It was also found that the bank accounts of the employees were used to receive money, which was subsequently withdrawn in cash, the CBDT added.

The statement said "profit earned from such receipts were never disclosed in the income tax returns (ITRs) filed."

"Only the commission received from foreign universities has been shown as receipts in the ITRs by the members of the group," it said.

Unaccounted income of about Rs 40 crore has been detected and Rs 20 lakh cash and jewellery of Rs 33 lakh has been seized, the statement said.