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I-T Dept finds over Rs 800 cr siphoned off by auto major; sources say it is Hero MotoCorp

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I-T Dept finds over Rs 800 cr siphoned off by auto major; sources say it is Hero MotoCorp

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The I-T Department covered more than 35 premises across Delhi-NCR on March 23 and found various incriminating documents and digital evidence indicating bogus expenses.

The Income-Tax Department conducted a search and seizure operation on a leading automobile manufacturer group, a company operating chartered flights and a real estate group of Delhi-NCR, said the Ministry of Finance on Thursday in a statement.

Sources told CNBC-TV18 that the auto major mentioned in the statement is Hero MotoCorp.
The I-T Department covered more than 35 premises across Delhi-NCR on March 23 and found various incriminating documents and digital evidence indicating bogus expenses, said the ministry.
"During the course of the search operation, various incriminating documents and digital evidence have been found and seized indicating that the expenses ostensibly shown to have been claimed towards business purposes are not fully supported by evidences," the statement issued by the ministry reads.
According to the ministry, expenditure aggregating to more than Rs 800 crore has been booked in the guise of purchase of services from a specific event management entity.
The sources, who did not want to be named, told CNBC-TV18 that the bogus expenditure of Rs 800 crore as mentioned in the release was made by Hero MotoCorp.
"This entity has siphoned-off the money by way of layering.  Such claims towards non-business purposes are inadmissible expenditure under the provisions of the Income-tax Act, 1961," the government said.
According to the statement, it was also found that 10 acres of farm land at Delhi was purchased through few paper companies and of these transactions, unaccounted cash component of over Rs 60 crore was purportedly involved.
As stated by the ministry, the ultimate beneficiary of the land deal is a prominent person of the automobile manufacturer group. "The intermediary who facilitated the said deal has admitted in his statement that major part of the sale consideration was paid in cash," added the statement by the ministry.
Apart from this, several incriminating documents have been unearthed from the premises of persons involved in the real estate business containing records of on-money transactions where cash was being received in lieu of sale of units in their various real estate projects across Delhi.
In the case of the company operating chartered flights, evidence related to booking of bogus expenses and non-recognition of income totalling to over Rs 50 crore, rotation of funds and suspicious loans through a dubious NBFC floated by a key person, layering and re-routing of funds through paper companies and claiming bogus interest expenses, etc. have also been unearthed, it added.
"Undisclosed cash exceeding Rs 1.35 crore has been seized and jewellery over Rs 3 crore has been kept provisionally under restraint," added the ministry saying further investigations are in progress.
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