Illegal fin. transactions by Media Houses led to raids: IT Deptt.

New Delhi, July 24 (UNI) A Rs 7,000-crore diversified business group with interests in media, power, textiles and real estate floated several companies in the name of its employees and used them for booking bogus expenses, siphoning off the profits from listed companies and making circular transactions, said the Income-Tax department after searching the company’s premises across cities including Bhopal, Indore and Noida.
“The quantum of income escapement using this modus operandi, detected so far, amounts to Rs 700 crore spread over a period of 6 years. However, the quantum may be more as the group has used multiple layers and investigations are being carried out to unravel the entire money trail,” said a press release from the department.
The department said that these involve violation of S.2(76)(vi) of Companies Act and Clause 49 of Listing Agreement prescribed by SEBI for listed companies. Further, application of Benami Transaction Prohibition Act will also be examined.
“Cyclical trading and transfer of funds among group companies engaged in unrelated businesses to the tune of Rs 2200 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,” it said.
The official media release said that the real estate entity of the business group operating a Mall had been sanctioned a term loan of Rs 597 crore from a nationalized bank.
“Out of this, an amount of Rs 408 crore has been diverted to a sister concern as loan at low interest rate of 1%. While the real estate company has been claiming expenses of interest from its taxable profit, it has been diverted for personal investments of the holding company,” it claimed.
The department further said that the listed media company does barter deals for advertisement revenues, whereby immovable properties are received in lieu of actual payments.
“Evidences have been found indicating cash receipts in respect of subsequent sale of such properties. This is under further examination,” said the press release.
The Income Tax Department carried out the search operation under section 132 of the Income Tax Act, 1961 on July 22, 2021.