Income Tax Raid: The department has issued a statement regarding the raid of the Income Tax Department on a wire and cable company. The department issued a press release saying that a total of 50 locations of Flagship Group in Mumbai, Pune, Aurangabad, Nashik, Daman, Halol and Delhi have been raided on 22 December 2023. In this raid, the tax department has detected cash sales worth Rs 1000 crore, no account of which has been recorded in the accounts. The tax department said that it has found evidence that a distributor has paid Rs 400 crore in cash on behalf of the flagship company for the purchase of raw materials, which has been confiscated by the department.
The Income Tax Department said that during the raid it has found a large number of incriminating evidence in the form of documents and digital data which have been confiscated. It is clear from this evidence that tax evasion was being carried out by the group in connivance with some authorized distributors. Preliminary analysis reveals that the group company was incurring expenditure on unaccounted cash sales, unaccounted purchases made through cash payments, non-genuine transportation and sub-contracting to hide taxable income.
< p style="text-align: justify;">The Income Tax Department said that it has detected unnecessary expenses of Rs 100 crore on account of sub-contracting expenses, purchases and transport, evidence of which has been found at the locations of the flagship company. The Income Tax Department said that during the raid, it was found that a distributor had issued bills without any supply while the goods were sold in the open market for cash. In this manner, the authorized distributor has facilitated some parties to inflate purchase accounts to the tune of Rs 500 crore. These distributors used to sell exclusive products for the flagship company. The Income Tax Department has found unaccounted cash worth around Rs 4 crore during the raid and 25 lockers have been frozen. The department said that the investigation is still going on.
The Income Tax Department has not taken the name of the company but it is believed that this company is Polycab India. After the Income Tax raid on Polycab India, there was a big fall in the stock. The stock has fallen by 9 percent in the last one week and by 10 percent in a month. Polycab is one of the multibagger stocks of the stock exchange in 2023.
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