BENGALURU: Sleuths of Income-Tax Department, Karnataka-Goa region have unearthed close to Rs 195 crore worth of undisclosed income following raids in three fish processing industries located in Mangaluru and Udupi. About Rs 88 lakh of unaccounted cash was also seized during the raid.
The extent of undisclosed income is expected to go up further as the department had plans to investigate all related parties. Bank transactions of these firms and investors in the firms in India and abroad, and other investments will be probed, said a release by the department.
Searches, which began on February 8, were conducted in 20 premises and surveys in 23 premises, which were spread across five states. Prior to the raid, the department had conducted discrete enquiries for more than than three months.
Bogus creditors and Malpractices
During the raid, several malpractices of the processing units were also revealed. Officials found cases where fish oil was adulterated with lower grade oils, misuse of diesel subsidy by procuring boats on various benami names and others. "...it was found that the processing units are, with the help of agents, showing huge bogus creditors in the name of fishermen. It was also found that huge cash was paid to the agents in the name of fishermen, violating the provisions of the Income Tax Act," the release noted. Various benami entities were also floated in the name of relatives and employees to make unaccounted investments, in violation of Prohibition of Benami Property Transaction Act, 1988.
Other irregularities found include, violations to Customs Act, whereinwhich the units importing fishmeal and the same was re-exported for making false claims of duty draw back. "In some instances, it was noticed that commission is being paid by Chinese company to the Indian middleman, outside India, and same was routed in hawala channels to countries like Dubai, Oman, Mauritania, Middle East and African counties. During the searches, the foreign account details and foreign investments, in violation of Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, were also found," the release added.
The same or similar modus is believed to be followed by many entities and individuals connected with the fishing industry. All such persons may like to come forward and pay due taxes on their own.