Polycab Faces Rs 1,000 Crore Tax Evasion Charges After Surprise IT Raids; Shares Down 16%

11 Jan 2024 , 11:09 AM

According to an official announcement by the Ministry of Finance, the Income Tax agency searched Polycab Group, a well-known maker of wires, cables, and electrical products, and discovered ‘unaccounted cash sales’ of about Rs 1,000 crore.

Last year in December, the I-T detectives started their search and seizure operations. More than fifty locations, including those in Delhi, Mumbai, Pune, Aurangabad, Nasik, Daman, and Halol, were the target of the search operation.

According to a ministry statement, the search operation demonstrated that Polycab India had unreported cash sales of approximately Rs 1,000 crore.

The CBDT reported that numerous digital data files and documents containing ‘incriminating’ evidence were taken during the raids. The group claimed that these expose the ‘modus operandi of tax evasion’ that it had employed in collusion with a few authorised distributors.

Additionally, unaccounted cash payments of over Rs 400 crore were seized by the income tax authority from a distributor acting on behalf of the flagship company.

The tax investigators also discovered bogus costs of approximately Rs 100 crore, including those related to subcontracting, procurement, transportation, and other charges.

The investigation also discovered strange transactions made by the distributor for billing without a real supply of products, even though those same goods had been paid for in cash on open markets.

The Ministry of Finance reports that during the search operation, over 25 bank lockers were placed under restriction and unaccounted cash worth more than Rs 4 crore was found.

Pokycab India denied the tax evasion claims on Tuesday.

‘Plycab India remains focused on its mission to provide quality products and services to its customers while upholding the principles of corporate governance and ethical business practices,’ Polycab told the stock exchanges on January 9.

On Thursday, Polycab India’s shares were down 16.26% at Rs 4,103.

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