Income Tax Department raids 23 premises of Gujarat diamond manufacturer

By

Isabelle Crossley

Published
Sep 27, 2021

The Income Tax Department raided 23 premises with connections to a Gujarat-based diamond manufacturing business as part of its investigation into alleged tax evasion.

“The highlight of the search includes seizure of large volume of unaccounted data seized in the paper as well as digital form, which was kept at secret locations under the custody of its trusted employees at Surat, Navasari, Mumbai,” the Union Ministry of Finance announced in a press release, Asian News International reported.
 
The Income Tax Departments were conducted covertly on September 22 following intelligence that the as yet unnamed diamond business was involved in tax evasion. The department is now reviewing the allegedly unaccounted data.

“The data includes proof of unaccounted purchases, unaccounted sales, taking accommodation entries for purchases against which cash is received, the movement of such cash and stock through angadia firms, keeping the unaccounted cash with angadias, investment of such unaccounted income for purchase of property and stock, etc for the last five years,” said the Ministry of Finance.
 
The department’s preliminary data analysis has found that the business is responsible for unaccounted purchases and sales of small polished diamonds of about Rs 518 crore, it said. The business was also using a Hong Kong-registered company to conduct dealings based in India and used cash payments to avoid declaring income. 
 
India’s diamond and jewellery industries have witnessed a number of high profile scandals in recent years, the most well-known of which being the alleged fraud by jewellery tycoons Nirav Modi of his eponymous brand and Mehul Choksi of Gitanjali Gems. Fraud cases and tax scandals have made banks more cautious of lending to the sector.