Polycab India Ltd. has denied receiving communication from the Income Tax department regarding the outcome of the search, a day after authorities alleged detection of unaccounted cash sales of Rs 1,000 crore and non-genuine expenses.
The company understands that there is a press release, titled ‘Income Tax Department conducts search operations in Mumbai', but has not received any written communication, it said in an exchange filing on Thursday.
The company will continue to fully cooperate with the IT department, and post-search proceedings will take its own course, it said.
There is no material adverse impact on the financial position of the company, the cables and electrical items manufacturer said.
The IT department has claimed it detected unaccounted cash sales of Rs 1,000 crore and Rs 400 crore in cash payments, made by a distributor on behalf of the flagship company.
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.
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.
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, the Finance Ministry statement said.
The IT department initiated search operations against Polycab India and its authorised distributors on Dec. 22, 2023, in more than 50 premises located in Mumbai, Pune, Aurangabad, Nasik, Daman, Halol and Delhi.
Shares of Polycab India were locked in a 20% lower circuit and the price band was revised three times on Thursday.
Shares of the wire manufacturer closed 21% lower at Rs 3,878.4 apiece on the NSE, as compared with a 0.13% advance in the benchmark Nifty 50.
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