Income Tax Raids On Polycab Reveal Rs 1,000-Crore Unaccounted Sales: Finance Ministry
The search action was conducted at more than 50 premises located in Mumbai, Pune, Aurangabad, Nasik, Daman, Halol and Delhi.
The Income Tax Department has detected unaccounted cash sales of about Rs 1,000 crore after it initiated search and seizure operations against the Polycab Group, according to people aware of the development who spoke on condition of anonymity.
Preliminary analysis suggests the company indulged in unaccounted cash sales, cash payments for unaccounted purchases, non-genuine transport and sub-contracting expenses, etc, for suppression of its taxable income, a Finance Ministry statement said.
Apart from unaccounted cash sales of around Rs 1,000 crore, evidence of unaccounted cash payments of more than Rs 400 crore made by a distributor on behalf of the flagship company has also been seized, the statement said.
The IT department also identified non-genuine expenses, aggregating to Rs 100 crore, and inflating the purchase accounts through authorised distributors aggregating to Rs 500 crore.
The evidence reveals modus operandi of tax evasion adopted by the group in connivance with some of the authorised distributors, it said.
The IT department initiated search and seizure operations against Polycab India and its authorised distributors on Dec. 22, 2023.
During the search operation, unaccounted cash exceeding Rs 4 crore has been seized and more than 25 bank lockers have been put on restraint, the Finance Ministry said.
Further investigations are in progress, and the search action was conducted at more than 50 premises located in Mumbai, Pune, Aurangabad, Nasik, Daman, Halol and Delhi.
After media reports of a Rs 200 crore tax demand from the IT department, the cables and electrical items manufacturer denied rumors of tax evasion.
The company asserts its commitment to compliance and transparency, having fully cooperated with the Income Tax Department officials during the search proceedings, the company said after exchanges sought clarification.
Shares of Polycab India closed 0.96% higher at Rs 4,914.00 apiece on the NSE, as compared with a 0.34% advance in the benchmark Nifty 50.
