Probing fictitious transactions of Rs 2,200 cr: CBDT after raiding media group

The Central Board of Direct Taxes CBDT has claimed to have detected fictitious transactions of Rs 2200 crore after the Income Tax Department carried out multicity raids against the Dainik Bhaskar media group early this weekIt said the searches that were launched on July 22 in nine cities like Bhopal Indore Delhi Ahmedabad Noida and some others are continuing and further investigations are in progress The voluminous material found during the search operations is being examined the CBDT statement said The CBDT frames policy for the IT DepartmentWhile the statement did not name the group official sources identified it to be the Bhopal headquartered Dainik Bhaskar group which is involved in various business sectors like media power textiles and real estate with a group turnover of more than Rs 6000 crore per annum Cyclical trading and transfer of funds among group companies engaged in unrelated businesses to the tune of Rs 2200 crore has been found The enquiries have confirmed that these have been fictitious transactions without any actual movement or delivery of goods The tax effect and violation of other laws are being examined the statement allegedThe media group on the day of the raids had posted a message on its website saying the government was scared of its true journalismFrom bodies in river Ganga to Corona deaths the group that brought the real numbers in front of the country is being raided by the government it alleged in a message in Hindi I am independent because I am Bhaskar Only the readers will matters in Bhaskar it had said The CBDT statement alleged that the group has more than 100 companies including the holding and subsidiary companies and that they have been operating several companies in the names of their employees that have been used for booking bogus expenses and routing of fundsAlso Read Looked only at financial transactions of Dainik Bhaskar group Income Tax departmentDuring the search several of the employees whose names were used as shareholders and directors have admitted that they were not aware of such companies and had given their Aadhaar card and digital signature to the employer in good faith Some were found to be relatives who had willingly and knowingly signed the papers but had no knowledge or control of the business activities of the companies in which they were supposed to be directors and shareholders the CBDT claimedSuch companies it alleged have been used for multiple purposes like booking bogus expenses and siphoning off the profits from listed companies routing of funds so siphoned into their closely held companies to make investments making of circular transactions etc The nature of such bogus expenditures booked vary from supply of manpower transport logistics and civil works and fictitious trade payablesThe quantum of income escapement using this modus operandi detected so far amounts to Rs 700 crore spread over a period of six years it claimed However the quantum may be more as the group has used multiple layers and investigations are being carried out to unravel the entire money trail it added The statement said the tax department is probing the violation of certain sections of the Companies Act and Clause 49 of the Listing Agreement prescribed by SEBI for listed companies in this caseApplication of Benami Transaction Prohibition Act will also be examined it said The CBDT said the real estate entity of the group is operating a mall and had been sanctioned a term loan of Rs 597 crore from a nationalised bank Out of this an amount of Rs 408 crore has been diverted to a sister concern as a loan at a lowinterest rate of one per cent While the real estate company has been claiming expenses of interest from its taxable profit it has been diverted for personal investments of the holding company it allegedThe listed media company does barter deals for advertisement revenues whereby immovable properties are received in place of actual payments it saidEvidences have been found indicating cash receipts in respect of the subsequent sale of such properties This is under further examination the statement saidThe CBDT said evidences found during the raids indicate receipt of onmoney in cash on sale of flats by the realty arm of the group The same has been confirmed by two employees and a director of the companyThe modus operandi as well as the corroborating documents have been found The exact amount of outofbooks cash receipts are being quantified it saidThe tax officials found a total of 26 lockers in the residential premises of the promoters and key employees of the group which are being operated it saidThis story has been sourced from a third party syndicated feed agencies Midday accepts no responsibility or liability for its dependability trustworthiness reliability and data of the text Midday managementmiddaycom reserves the sole right to alter delete or remove without notice the content in its absolute discretion for any reason whatsoever