I-T Deptt failed to unearth Rs 10,640 cr black money in Mah, says CAG report

Source: The Hitavada      Date: 17 Mar 2017 08:35:04


NEW DELHI,

Mar 16,

(PTI),

Around 2,059 dealers issued invoices involving tax evasion of more than Rs 10,640 cr including maximum VAT of 12.5 per cent in Maharashtra, CAG said. Many Maharashtra based firms raise bogus bills resulting in such huge tax evasion.

THE Income Tax Department (ITD) failed to unearth black money generated by several Maharashtra based firms despite getting clues on suspects
who raised only bogus bills resulting in tax evasion of over Rs 10,640 crore, according to official auditor CAG.
Around 2,059 dealers issued invoices involving tax evasion of more than Rs 10,640 crore including maximum VAT of 12.5 per cent in Maharashtra, CAG said in its report presented in Parliament.


In 2008-09, Maharashtra Sales Tax Department (MSTD) in a disclosure to Bombay High Court informed about its probe on 1,555 hawala operators involving 39,488 beneficiary dealers who had passed on input tax credit of Rs 1,333 crore in the previous three fiscals. They used to claim and obtain input tax credit against declaration of fake tax invoices without actual transactions.


The MSTD started putting out names of entities involved in such practices on its website from November 2011. Examining records of 2009-10 to 2013-14, Comptroller and Auditor General of India (CAG) said 35 cases had PANs in the bogus purchases list of MSTD. Such assessees in the state either did not file return or filed with meager income/nil income or stopped filing return in later years, CAG added.


“Income Tax Department (ITD) took up only those cases for scrutiny where income was reported. ITD did not take any action to examine the veracity of the facts reported therein nor did they fully follow the information provided by their own investigation wing,” the CAG report said.


“Bogus bills may be prepared to show inflated expenses in the books. Such a practice also involves ‘hawala’
operators who operate shell entities for accepting cheques for payments claimed as expense in exchange of cash after charging commission and give rise to black money in market.”