The Income Tax Department on Wednesday said that they have found that Pushparaj Pampi Jain is involved in tax evasion by under reporting sale of perfumes, stock manipulation, fudging books of account to shift profits from the taxable unit to the tax exempt unit and inflation of expenditure. They also accused another perfume businessman of committing the same offence.
Pushparaj Pampi Jain, who is an MLC of the Samajwadi Party, has been accused of evading tax of Rs 10 crore. He also allegedly didn’t declare an income of Rs 45 crore which the IT team found in the probe.
The IT officials carried out a search and seizure operation on December 31 at the premises of Jain and others. The officials said that around 40 premises in the states of Uttar Pradesh, Maharashtra, Delhi, Tamil Nadu and Gujarat were covered during the search operation.
In the case of Jain, the IT team found that his company is involved in tax evasion by under-reporting sale of perfumes, stock manipulation, fudging books of account to shift profits from taxable unit to tax exempt unit, inflation of expenditure.
“Evidence found in the sales office and main office has revealed that the group makes 35% to 40% of its retail sales in cash by ‘kuchaa’ bills and these cash receipts are not recorded in the regular books of account, running into crores of rupees.”
“Evidence of booking purchases from bogus parties to the extent of about Rs 5 crore has also been unearthed,” said the IT official.
He said that the analysis of incriminating evidence indicates that unaccounted income so generated is invested in various real estate projects in Mumbai and acquisition of property both in India and The United Arab Emirates.
The IT teams have also detected that the group has evaded tax of Rs 10 crore on conversion of the stock-in-trade to capital as the corresponding income has not been declared.
The official said that Pampi has also not declared income amounting to Rs 45 crore on the benefits paid to retiring partners.
“Evidence has also been found and seized substantiating that the promoters of the group have incorporated some offshore entities. However, such offshore entities have not been reported in their respective Income Tax Returns. The evidence recovered during the search reveals that the offshore entities are run and managed by the Indian promotors,” said the official.
The official said that two such offshore entities have also been found to own one villa each in the UAE.
It has also been unearthed that one of the offshore entities of the group from the UAE has purportedly introduced illicit share capital of over Rs 16 crore in an Indian entity of the group, at an exorbitant premium.
“This recipient group entity has also obtained a further sum of Rs 19 crore in the form of illicit share capital from certain Kolkata based shell entities. One of the shareholder directors of these shell entities admitted on oath that he was a dummy director and invested in share capital of the group company at the instance of the promoters of the group,” said the official.
The IT officials said that during the course of search action on another UP based group, incriminating evidence substantiating unrecorded cash transactions of about Rs 10 crore has been found and seized.
It is also gathered that the group is not maintaining any stock register for its inventory.
So far, unaccounted cash exceeding Rs 9.40 crore and unexplained jewellery worth more than Rs 2 crore have been seized. Several bank lockers have been placed under restraint and are yet to be operated.