Tax Evasion On Rs 700 Crore Found In Dainik Bhaskar Raids: Tax Department

Media group Dainik Bhaskar and an Uttar Pradesh-based news channel were raided today by Income Tax officials on Thursday.

Unpaid taxes on Rs 700 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 on the Dainik Bhaskar Group, the Income Tax Department said on Saturday, two days after the raids on the conglomerate with media outlets critical of the government triggered outrage. "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. During the search, several of the employees, whose names were used as shareholders and directors, have admitted that they were not aware of such companies and had given their Aadhaar card and digital signature to the employer in good faith. Some were found to be relatives, who had willingly and knowingly signed the papers but had no knowledge or control of the business activities of the companies, in which they were supposed to be directors and shareholders," 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. For example, the nature of such bogus expenditures booked, vary from supply of man power, transport, logistics and civil works and fictitious trade payables. 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," it added. The tax department said it had also found violation of rules prescribed by the 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.