I-T searches in UP, Raj dairy firms unearth Rs 700cr bogus transactions

Agra: The income tax department's investigation wing has unearthed evidence of bogus transactions to the tune of Rs 600-700 crore during extensive search operations at establishments of major dairy product manufacturers and their linked entities in Agra, Dholpur, Bikaner and Jodhpur, officials said on Wednesday.More than 200 I-T department officials searched over 35 premises of these manufacturers having establishments in Delhi, Agra, Dholpur, Kanpur Dehat, Aligarh, Sirsaganj, Dausa, Bikaner and Jodhpur. The searches began on Jan 15 and continued for nearly 131 hours, the official said.The search was directed at some manufacturers and adulterators of dairy products. "In accounting terms, manufacturing cost of adulterated ghee (clarified butter) is very low, but it is shown in the account books as pure ghee, the manufacturing cost of which is high, thereby suppressing profit margins and evading tax," an I-T department official told TOI on the condition of anonymity.Document accessed by TOI showed the investigation wing of I-T department, Agra, initiated search actions on Jan 15 on residential and business premises of Dauji Milk Food Pvt Ltd (Dauji Group of Agra-Bharatpur) and Poddar Milk Products Pvt Ltd (Poddar group of Sirsaganj).During the search, samples of products from Dausa-based factory of Dauji Milk Food Pvt Ltd were taken and sent to the FSSAI lab in New Delhi for testing. These samples were found sub-standard, following which the I-T department shared the information with the enforcement division of FSSAI for further action.The Agra unit of income tax investigation also initiated simultaneous searches on business and residential premises of Bhole Baba Milk Food Industries Limited, Bhole Baba Milk Food Industries (Dholpur) Pvt Ltd (Bhole Baba Group of Agra), Ashish Agarwal group of Bikaner and Malani Group of Jodhpur over tax evasion. "The department found incriminating material that suggests tax evasion to the tune of hundreds of crores of rupees. The department will now investigate further and ascertain the exact quantum of tax evasion, which may even range up to a thousand crore rupees," said Ajay Kumar Atri, director general of income tax, Lucknow, who led the team, along with principal director of income tax (investigation) Ajay Kumar Sharma."There are instances where purchases and sales were booked on paper, but no transfer of stock happened, indicating bogus purchases having an impact on Input Tax Credit claims. The I-T department will now scrutinise the evidence and ascertain the income figure and tax evaded. For coordinated investigation, the department plans to initiate inter-agency coordination on such tax evaders in future," Atri said.