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The tax department has been holding searches and surveys on entities suspected of tax evasion and money laundering.
The tax department has been holding searches and surveys on entities suspected of tax evasion and money laundering.

Income Tax department busts racket that helps tax evaders

  • The tax department has been holding searches and surveys on entities suspected of tax evasion and money laundering
  • The bogus transactions were detected in investigations into entities that provide fraudulent invoices that some businesses use to inflate their spending

NEW DELHI : The Income Tax department said on Thursday it has unearthed bogus transactions to the extent of Rs.735 crore in searches and surveys held in Mumbai and Surat earlier this month.

The bogus transactions were detected in investigations into entities that provide fraudulent invoices that some businesses use to inflate their spending and to suppress income. The operation also covered contractors doing civil work for the Brihanmumbai Municipal Corporation (BMC). Bogus invoices used for suppressing income is called ‘accommodation entries’ and those who are engaged in this are called ‘entry providers’.

The tax department has been holding searches and surveys on entities suspected of tax evasion and money laundering in the western region, especially, builders and onion traders, in the last few weeks.

In the latest round of search, 37 premises were covered and seven premises were surveyed. The department said incriminating evidence showing large scale tax evasion and money laundering has been found. Tax officials also detected bogus companies floated by ‘entry providers’ for giving entries to businesses in the form of loans or bills for expenses, the statement said.

It also said that in some cases, bank fraud, forgery and diversion of bank loans by companies into investments in immovable properties have been detected.

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