I-T uses ‘Shri Ram’ banner on vehicle to avoid detection during raids, seizes cash, jewellery worth Rs 16 cr
The Income Tax department’s investigation wing from Uttar Pradesh has carried out raids on the Gallant Group of companies. In order to avoid detection, the vehicles used a banner of ‘Shri Ram Janki Yatra’.
The banner mentioned that the vehicle was part of a spiritual tour covering several states, starting from Ayodhya and passing through areas like Nandigram in West Bengal, Prayagraj and Varanasi in Uttar Pradesh, Janakpur in Nepal and Sitamarhi in Bihar.
I-T officials used the banner so that no one could detect them moving to the selected premises owned and controlled by the Gallantt Group of companies. The I-T department raided the premises of the companies’ promoters, employees, ‘hawala’ operators and others related to it.
The company under investigation
Gallantt Group consists of companies — Gallantt Ispat Ltd and Gallant Metal Ltd — and is involved in the manufacturing of sponge iron and TMT bars. The group claims they are the leading TMT bar manufacturers based in Uttar Pradesh. The plant is based in Gorakhpur. CP Agarwal is the promoter of Gallantt Group.
According to sources, a former chief minister of Uttar Pradesh had helped set up the Gorakhpur plant of Gallantt Group. The said company also has a TMT manufacturing plant in Gujarat’s Kutch. Some top Bollywood stars are also brand ambassadors of the group.
IT raids and findings
The banner, according to sources, helped mask the movement of the income tax authorities who successfully carried out the raids and found details of suspicious transactions of over Rs 600 crores. Income Tax teams conducted raids at over 60 premises across Uttar Pradesh, Delhi, Gujarat, Kolkata, Bihar and NCR.
According to sources, I-T authorities found that over Rs 360 crores was infused into the Gallant Group, also known as Gallantt Ispat Industries through Kolkata, based hawala operators who provided the money in form of share capital for cash allegedly provided by the promoters of the company.
Other than the entries availed from hawala operators, over Rs 250 crores in cash was said to have been circulated in the name of various employees, vendors and others. Transactions related to scrap purchase by the company also were found to be suspicious hinting at large scale layering and tax evasion by the promoters of Gallantt Group.
During raids at residential and office premises of the promoters, I-T authorities found cash and jewellery of around Rs 16 crores. There were several documents pertaining to the purchase of large land parcels by the promoters but many of these properties were suspected to be Benami properties purchased through benamidars by the promoters. The benami transactions are also close to around Rs 100 crores which are also being investigated.
Suspected tax evasion of hundreds of crores, layering, suspicious infusion through share capital by shell companies run by hawala operators and diversion through employee and vendor accounts have been found during the primary investigation.
The benami wing of Income Tax will also start investigations and proceedings against the promoters for amassing benami properties in the name of benamidars.
