Tax evasion on Rs700 crore found in Dainik Bhaskar raids, says I-T dept

The Income Tax Department has found several irregularities during the raids in the Dainik Bhaskar Group premises. Unpaid taxes on Rs700 crore of income over six years, violation of stock market rules, and evidence of profits being siphoned off from listed companies have been found in searches at the Dainik Bhaskar Group. "During the search, it was found that they have been operating several companies in the names of their employees, which have been used for booking bogus expenses and routing of funds... Several of the employees, whose names were used as shareholders and directors, have admitted that they were not aware of such companies," the tax department said in a statement.

“Such companies have been used for multiple purposes namely booking bogus expenses and siphoning off the profits from listed companies, routing of funds so siphoned into their closely held companies to make investments, making of circular transactions etc.” According to the IT department, the quantum of income escapement using this mo­dus operandi, detected so far, amounts to Rs 700 crore spread over six years. However, the quantum may be more as the group has used multiple layers and probes are being carried out to unravel the entire money trail. The tax department said it had also found a violation of rules of the stock market regulator Securities and Exchange Board of India (SEBI) for listed companies. "Application of Benami Transaction Prohibition Act will also be examined," it said.

A total of 26 lockers have been found at the homes of the promoters and key employees of the group, which are being operated, the tax department said and added that cyclical trading and transfer of funds among group companies engaged in unrelated businesses to the tune of Rs 2,200 crore has been found. The enquiries have confirmed that these have been fictitious transactions without any actual movement or delivery of goods. The tax effect and violation of other laws is being examined.

In a separate statement about the raids on Bharat Samachar, the Income Tax Department claimed to have seized documents and digital records that indicate "unaccounted" transactions of about Rs 200 crore. "Cash of more than Rs 3 crore has been seized and 16 lockers have been placed under restraint. The statement claimed that evidence found during searches "establishes" that the business group has been earning huge outside-the-books income through mining, processing and sales in liquor, flour business, real estate and more.