Developments in the recent Dainik Bhaskar raid has surfaced where Tax Evasions worth Rs. 700 crores have been identified during the raid by the I-T department. Further, the tax department also found the company to be in violation of Securities and Exchange Board of India (SEBI) rules and evidences were also found out that profit was laundered.
Details
A couple of days after raids were executed on the media house Dainik Bhaskar (DB) Group’s office premises across major centers in the country, the I-T department have released the findings from the raid. The tax department claimed that it found out tax evasions worth Rs. 700 crores over the course of six years, SEBI Rules violation and evidence that profits had been siphoned from listed companies.
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“Names of employees used for bogus expenses”
The Income Tax department in its statement said that during the raids it was found out that-
“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.”
The tax department said that the names of employees which were used as directors and shareholders claimed that they were not aware of such companies.
The statement further said-
“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.”
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Rs. 700. Crores of Evasion in 6 Years, Money Trail Being Investigated
The department also said that the overall evasion using the above-mentioned method has been identified to amount as much as Rs. 700 crores that has been spread over the course 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 acknowledged.
DB Group Guilty of SEBI Rule Violation
Meanwhile, the raids also led the tax department to find out that the Dainik Bhaskar Group was in violation of SEBI rules for the listed companies. The department’s statement said-
“Application of Benami Transaction Prohibition Act will also be examined.”
The ‘Benami Transaction’ means that when a property is transferred and the consideration for the same is paid by a different person for whose benefit the property is held.
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Rs. 2,200 Crores of Funds Being Probed
The magnitude of the alleged tax evasion and fraud is such that the tax department claimed that transfer of funds among companies which engaged in different unrelated businesses amounted to Rs. 2,200 crores.
“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.
Further, the tax department said that the group engages in barter deals where it receives properties in the form of actual payments for advertising revenues. The tax department also found out receipts related to the sale of the above-mentioned properties.
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What Happened After the Raid?
Earlier this week, over 30 locations of Dainik Bhaskar group had to faced raids from the Income Tax Department. The raids took place in Delhi, Madhya Pradesh, Gujarat, Maharashtra, Rajasthan. Further, the residences of the group’s promoters and executives were also raided by the tax department.
After the DB Group faced raids, the opposition slammed the Centre for acting out against journalism platforms that were critical of the current government. Editor’s Guild of India (EGI), India’s apex body on journalism, said that government agencies are being put to use as a weapon to suppress “free and independent journalism”.
It should be interesting to see whether the EGI or the opposition changes their stance after the recent findings by the income-tax group.
