CBDT Discovers Fictitious Transactions Worth Rs 2200 Crore Upon IT Raids At Dainik Bhaskar Group: Report

The Income Tax Department’s multi-city raids against the Dainik Bhaskar media group has resulted in detection of fictitious transactions worth over Rs 2200 crore, as per the revelations of the Central Board of Direct Taxes (CBDT).

Apparently, the searches carried out in nine cities including the likes of Delhi, Ahmedabad, Noida amongst others are still in progress whilst the ‘voluminous material’ that were found during the operations are being examined simultaneously.

“Cyclical trading and transfer of funds among group companies engaged in unrelated businesses to the tune of Rs 2,200 crore has been found,” the official statement from the board read, as per a report from the Press Trust of India (PTI).

It added, “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 are being examined.”

The Dainik Bhaskar group is engaged in multiple sectors of business such as real estate, textiles, power along with media and has an annual turnover of more than Rs 6000 crore.

The CBDT statement stated that the group has more than 100 companies including the holding and subsidiary companies and that they have been operating several companies in the names of their employees that have been used for booking "bogus" expenses and routing of funds.The aforementioned bogus expenditures include the supply of manpower, logistics, civil works, fictitious trade payables, transport etc.

“The quantum of income escapement using this modus operandi, detected so far, amounts to Rs 700 crore spread over a period of six years,” the board claimed.

In fact, prospective violation of some sections of the Companies Act along with Clause 49 of the Listing Agreement as ordered by the Securities and Exchanges Board of India (SEBI) will be investigated by the tax department.