The Income Tax department said in an official statement on Sunday that it has conducted a search. They seizure operation on a Maharashtra-based unicorn start-up group that is mainly engaged in wholesale and retail construction material. The group, the department added, has a presence across the country and has an annual turnover of more than Rs. 6,000 crore.
Preliminary analysis showed that the total quantum of accommodation entries allegedly provided by these shell entities exceeds Rs. 1,500 crore, the department said. According to the statement, unaccounted cash of Rs. one crore and jewelry worth Rs. 22 lakh have been seized. Further investigations are on, the department said.
A person aware of the development, on condition of anonymity, said the unicorn mentioned by the I-T department is Infra. Market.
The operation held on 9 March, covered 23 premises across Maharashtra, Karnataka, Andhra Pradesh, Uttar Pradesh, and Madhya Pradesh. The group is based in Pune and Thane. Incriminating evidence in the form of documents and digital data has been found and has been seized during the search, the department added.
It showed that the group allegedly booked bogus purchases, made huge unaccounted cash expenditures, and obtained accommodation entries, totaling over Rs. 400 crores, the statement said. Accommodation entries are bogus transactions.
The Income Tax department has detected “undisclosed” income of more than Rs 224 crore after it recently raided Maharashtra-based unicorn start-up Infra. Market, officials said on Sunday.
The searches were launched on March 9 at the firm’s 23 premises in Maharashtra, Karnataka, Andhra Pradesh, Uttar Pradesh, and Madhya Pradesh.
While the I-T department didn’t name the company, it is believed to be referring to Infra. Market, the construction materials startup that its officials raided recently. Infra. The market is backed by Tiger Global, Nexus Venture Partners, and Accel and is valued at $2.5 billion.
It also said the company appeared to have booked bogus purchases, made huge unaccounted cash expenditures, and obtained accommodation entries totaling over Rs 400 crore. During the search operations, Rs 1 crore in unaccounted cash and jewelry worth Rs 22 lakh were also seized, the department said.
The department, whose investigations are ongoing, said it also found a “complex hawala network of some Mumbai and Thane-based shell companies”. They exist only on paper and have been created for the “purpose of providing accommodation entries.”
“These shell companies exist on paper and were created only to provide accommodation (bogus) entries. Preliminary analysis has revealed that the total quantum of accommodation entries provided by these shell entities exceeds Rs 1,500 crore,” it said
When reached out for a comment, a spokesperson for infra. market said, “As per our company policy, we ensure adherence to the applicable tax laws, at all times.”
“We continue to work with the department to solve all their queries related to any transaction. Since the investigation is still ongoing we will wait for the final report to comment further,” the spokesperson added.