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Taxmen raid 23 premises of a Gujarat diamond firm in multi-crore fraud

By Saima Siddiqui 
Updated Date

New Delhi: The Central Board of Direct Taxes or CBDT on Saturday claimed that the Income Tax Department has detected tax evasion worth crores of rupees in raids on a Gujarat’s leading diamond manufacturer and exporter.

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The searches were launched on September 22 at 23 premises of the group, which is also in tiles manufacturing business, at Surat, Navsari, Morbi and Wankaner (Morbi) in Gujarat and Mumbai in Maharashtra.

The raids are still being carried out, it said.

“The primary analysis of data reveals that the assessee has made unaccounted purchase and sale of small polished diamonds of about ₹ 518 crore over a period.”

“The data reveals that the assessee has sold more than ₹ 95 crore of diamond scrap in cash generated from its manufacturing activities, which remains unaccounted for and represents its income,” the Central Board of Direct Taxes (CBDT) claimed in a statement.

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The assessee, over the years, has accounted for the sale of about ₹ 2,742 crore of small diamonds in its books, against which, substantial part of purchases were made in cash, but the purchase bills were taken from accommodation entry providers, it alleged.

The statement said “unaccounted” cash and jewellery worth ₹ 1.95 crore has been seized during the raids and “unaccounted” diamond stock of 8,900 carat worth ₹ 10.98 crore has been detected.

“A large number of lockers belonging to the group have been identified, which have been placed under restraint and will be operated in due course,” it said.

“The data reveals that the assessee has made purchases of ₹ 189 crore and sale of ₹ 1,040 crore in the last two years through this entity.”The policy-making body for the tax department said that the group was making its “major purchases” of rough diamonds through imports and making export sales of finished bigger diamonds through its company registered in Hong Kong, which is effectively controlled and managed from India only.

“…financial transactions of real estate deals were found which led to the detection of unaccounted income of ₹ 80 crore,” it claimed.

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The sale transactions of shares pertaining to the business of tiles were examined which led to the detection of ₹ 81 crore of unaccounted income, the Central Board of Direct Taxes said.

It said the raid teams have seized paper as well as digital data, kept at secret locations under the custody of its trusted employees, that includes proof of unaccounted purchases and sales, accommodation entries (obtaining illegal business entries in accounts) for purchases against which cash is received, the movement of such cash and stock through angadia firms, keeping the unaccounted cash with angadias, investment of such unaccounted income for purchase of property and stock, etc for the last five years.

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