IT raids at 40 places, panic spread among Mines Owners and Steel makers

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By Our Correspondent

NEW DELHI/MUMBAI/BHUBANESWAR: Income Tax Department carried out Search and Seizure action on at Hyderabad, Vijaywada, Cuddapah, Vishakhapatnam, Delhi, Bhubaneswar, Kolkata and Pune. More than 40 premises were covered. The ongoing mining auction of Odisha is also under IT scanner and several  mines owners are on run after the news spread, sources said

The search action included three prominent infrastructure groups based in Andhra Pradesh and Telangana. Investigations led to busting of a major racket of cash generation through bogus sub-contractors, over-invoicing and bogus billing. Several incriminating documents and loose papers were found and seized during the search, apart from emails, WhatsApp messages and unexplained foreign transactions unearthed during the search.

Search operation was also carried out on close associates including ex-personal secretary of a prominent person and incriminating evidence seized.

The search operations revealed that Infrastructure companies had sub-contracted work to several non-existent/bogus entities. Preliminary estimates suggest siphoning of more than Rs. 2000 crore through transactions that were layered through multiple entities with the last in the chain being small entities with turnover less than Rs. 2 crore to avoid maintenance of books of accounts and tax audits etc. Such entities were either not found at their registered address or were found to be shell entities. Several such sub-contractors were controlled by the principal contractors with all their ITR filings and other compliances being done from the IP addresses of main corporate office.

FDI receipts of several crores in the group companies of one of the Infrastructure companies is suspected to be round-tripping of its unaccounted funds.Unexplained cash of Rs. 85 lakh and Jewellery worth Rs. 71 lakh have been seized. More than 25 bank lockers have been restrained.

Meanwhile, the Directorate General of GST Intelligence (DGGI), Gurugram Zonal Unit (GZU), Haryana, has arrested  Nitin Jain, resident of Sonepat, Haryana, proprietor of M/s Shiv Trade Incorporation, Delhi, for issuing bogus invoices.

During investigation it was revealed that  Nitin Jain has issued bogus invoices through his firm M/s Shiv Trade Incorporation and another firm M/s Om Trade Inexim, opened in the name of dummy person, of various types of goods namely ferrous/ non-ferrous scrap, ingots, nickel cathode etc. amounting to Rs 268.3 crores (approx).

Through bogus invoices, Nitin Jain has fraudulently passed Input Tax Credit (ITC) amounting to Rs 41.6 Crores (approx). This ITC was further availed by various entities to offset their GST liability and also passed on such fraudulent ITC to further buyers who availed the same to discharge their GST liability against their outward supplies with an ulterior motive to defraud the Government exchequer. During the course of investigation Shri Nitin Jain also admitted of having issued bogus invoices in lieu of certain fixed commission.

Thus, Nitin Jain has committed offences under the provisions of Section 132(1)(b) & (c) of the Central Goods & Services Tax Act (CGST), 2017, which are cognizable and non-bailable offences and punishable under Section 132 of the CGST Act, 2017. Consequently,  Nitin Jain was arrested on 12th February, 2020 under Section 69(1) of the CGST Act, 2017 and produced before Judicial Magistrate in Gurugram Court on 12th February, 2020. Court has sent him to judicial custody for 14 days. Further investigation in the matter is in progress.

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