I-T dept to probe Hero MotoCorp’s relationship with vendor
NEW DELHI: After a raid by the Directorate of Enforcement (ED) on Hero MotoCorp Chairman Pawan Kant Munjal’s residence earlier this month, Income tax authorities are said to be investigating Hero MotoCorp’s relationship with a vendor suspected of reporting about `90 crore ($11 million) in false expenditure.
Based on the alleged fake spending by vendor Salt Experiences, Hero MotoCorp received a tax credit, leading to suspected tax evasion of about `16 crore, said a report by Reuters, in which sources spoke on condition of anonymity. When contacted, Hero MotoCorp said there is no ongoing investigation against the company on the matter.
The fresh probe is being conducted by the Directorate General of Goods and Services Tax Intelligence (DGGI), the sources said. The investigation comes after the Directorate of Enforcement (ED), in a separate case, conducted searches at 12 premises owned by Hero MotoCorp and its founding shareholder Pawan Kant Munjal, seizing $3 million in assets.
The first source said Salt Experiences had paid 120 million rupees to the DGGI related to the alleged tax evasion, and the investigation was ongoing. The probe by the DGGI is being monitored by other agencies, such as the ED and Ministry of Corporate Affairs (MCA), sources said.
MCA is also probing Hero’s relationship with Salt Experiences in a case related to the alleged diversion of funds.