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India: I-T dept cracks down on ship-breaking firms

Monday, 20 February 2012 | 11:00
The income tax (I-T) officials on Friday cracked down on three Bhavnagar-based ship-breaking companies. A team of more than 200 officials carried out search and survey on 40 premises of the companies in Ahmedabad, Bhavnagar, Mumbai and Pune.
I-T sleuths have seized Rs 80 lakh cash and sealed seven lockers during the operation, which continued till late evening.
"We carried survey at 23 premises and searched 17, including offices of Leela Ship Breaking, Shree Ram Group of Industries and Bansal Group. The companies are in the business of ship-breaking and steel re-rolling. In Ahmedabad, we searched a manufacturing unit at Vatva, an office at CG Road and two residential premises," a senior I-T official said.
Officials said the companies are suspected of under billing and unaccounted sales.
"In 2010, Directorate General of Central Excise Intelligence (DGCEI) had busted a multi-crore excise duty evasion scam at Alang in which several ship-breaking companies were involved. Following the operation, several companies came under I-T scanner. We suspect that the companies undervalued the price of vessels coming for dismantling and sold the scrap and oil inside without invoices," the official said.
During the operation, tax officials seized Rs 55 lakh cash from Mukesh Patel-promoted Shree Ram Group's Mumbai office. Sources said the department suspects that the money generated through unaccounted sale of scarp is routed back through bogus share capital. Officials said that all the three companies are veterans in ship-breaking and have shown healthy growth in their balance sheets.
During the operation in 2010, Ahmedabad zonal unit of DGCEI has searched 18 premises of 11 ship-breaking companies in Alang. Investigations found that several companies were involved in large-scale under-valuation of excise duty and issuing of fake central value-added tax (Cenvat) invoices.
Source: TNN
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