I-T raid finds bogus spends of ₹800 cr at Hero
NEW DELHI: The Income Tax department said on Thursday it has found alleged illegal business expenditure worth ₹800 crore, concealed as purchase of services, and detected use of unaccounted cash worth ₹60 crore for purchase of 10 acre of farm land in Delhi, during its recent searches on Hero Motocorp and two other groups.
The department raided at least 35 premises last Wednesday, including the residence of Pawan Munjal, chairman and chief executive officer of Hero Motocorp, the two-wheeler manufacturing company’s offices, the premises of a company operating chartered flights, and a real estate group.
It didn’t name the real estate group and the company operating chartered flights. HT reached out to the Hero Motocorp group for comments but there was no statement till evening.
“During the course of the search operation, various incriminating documents and digital evidence have been found and seized indicating that the expenses ostensibly shown to have been claimed towards business purposes are not fully supported by evidences. Expenditure aggregating to more than Rs 800 crore has been booked in the guise of purchase of services from a specific event management entity. This entity has siphoned-off the money by way of layering. Such claims towards non-business purposes are inadmissible expenditure under the provisions of the Income Tax Act, 1961,” the Central Board of Direct Taxes, parent body of IT department, said.
“In the search, it was also found that 10 acres of farm land at Delhi was purchased through few paper companies. In such transactions, unaccounted cash component of over ₹60 crore was purportedly involved. The ultimate beneficiary of the land deal is a prominent person of the automobile manufacturer group. The intermediary who facilitated the said deal has admitted in his statement that major part of the sale consideration was paid in cash,” it said.
Several incriminating documents have also been recovered during the raids at premises of persons involved in the real estate business, the agency claimed. “These contain records of on-money transactions where cash was being received in lieu of sale of units in their various real estate projects across Delhi,” the CBDT said.