Nagpur: The income tax raid on two groups of supari (areca nut) trading companies in the city in January has revealed a tax evasion of nearly Rs 1,700 crore. This includes Rs 1,300 crore from a single firm.
It is for the first time that an undisclosed income exceeding Rs 1,000 crore has been calculated following a raid in the Nagpur region, which covers Vidarbha, Marathwada, and Nashik. Sources said the raid indicates the scale of unaccounted money changing hands in the city.
As an immediate consequence, the groups will have to pay 60% as tax, which comes to more than Rs 1,000 crore for both groups combined. The hidden income deals with a block period of the previous six assessment years, said sources.
Parallel Books of Accounts Found
The supari trade in the city had been on the taxmen's radar for a long time. During the raid, the tax sleuths could lay hands on a number of parallel books of accounts which spoke of massive cash transactions. The buyers' real identities are not revealed, and the entries were made against code names. Since there were no bank transactions against the sales recorded in such books, the taxmen have established it as cash deals.
Next Steps for the Supari Groups
Now, as a next step, the supari groups will have to file a block return taking into account the undisclosed income also and pay up the tax. A final assessment would also be done after that. If the companies own up, the income would be exempted from penalty to the extent of the admission made in terms of income earned, said sources. The parties covered under the raid can also file an appeal.
Smuggled Nuts Used in Trade
Sources privy to the supari trade said the use of smuggled nuts from countries like Indonesia, Thailand, and Myanmar has been rampant. The nuts are later shown as produce purchased from Indian farmers, or ultimately the entire chain of transaction happens in cash, evading tax at every level.
