Home » Unaccounted Transactions Worth Rs. 1,500 Crore Detected by IT Dept

Unaccounted Transactions Worth Rs. 1,500 Crore Detected by IT Dept

by Raju Vernekar
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By Raju Vernekar
Mumbai, Feb 19: 

The Income Tax Department detected unaccounted transactions of Rs 1,500 crore by a Mumbai-based group involved in hospitality business and manufacturing of gutkha and pan masala, after conducting raids from February 08 to February 13, in Mumbai and other parts of the country, the Central Board of Direct Taxes (CBDT) stated on Monday.
Although CBDT did not specify the group, the official sources in the tax department identified it as the “JMJ group” promoted by businessman J M Joshi. The development came almost at the same time when J M Joshi’s businessman and actor son Sachin Jagdish Joshi was arrested by the Enforcement Directorate (ED) in a money laundering case (suspicious transactions worth Rs 100 crore) linked to a Mumbai-based realty group. He was sent to ED custody till February 18 after he was produced before a Mumbai court that hears cases filed under the Prevention of Money Laundering Act 2002.
JMJ Group based in Mumbai is engaged in providing its services in various fields including manufacturing, blending of edible perfumes and essential oils, construction, infrastructure, and hospitality.
A company in British Virgin Islands
The raids led to the detection of foreign assets lying with a company registered in tax-haven British Virgin Islands (BVI) with an office in Dubai, and controlled and managed by the chairman of the group. The net worth of the BVI company is Rs 830 crore created by siphoning of funds from India. This fund was round-tripped to India in the form of a share premium amounting to Rs 638 crore in flagship companies of the group.
During the raids, various digital evidence and forensic analysis yielded email communication, establishing control and management of the company with the promoter of the group. One of the employees, who was also a shareholder in the BVI company, was identified and cross-examined with the promoter. It was accepted by parties involved that the employee was not aware of being a shareholder in the company and he had signed papers on the instruction of the main promoter.
The companies in Himachal Pradesh
Further, it was noticed that the group fraudulently availed deduction under section 80IC of the Income-tax Act, 1961 to an extent of Rs 398 crore. The group has set up two entities in Himachal Pradesh and was found indulging in sham transactions to claim the deductions. It was also noticed during the raids that the company had unaccounted for the production of pan masala worth Rs 247 crore at two factory premises of the group.
The group’s Gandhidham unit- JMJ Container Solution (Gujarat) had falsely claimed a Rs 63 crore deduction under section 10AA of the Income-tax Act, 1961. The income tax department seized Rs 13 lakh cash and jewelry worth Rs 7 crore during the raid. Prohibitory orders have also been placed on 16 lockers and in 11 premises of the company. Further investigations are in progress, Commissioner of Income Tax (Media & Technical Policy) Surabhi Ahluwalia, stated.

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