More Than Rs. 800 Crore Siphoned Off; I-T Dept. Alludes To Hero In Release

The Income Tax Department issued a press release on March 31, 2022, detailing its search and seizure operation related to a "leading automobile manufacturer group." While the I-T department did not directly name Hero MotoCorp, news reports claim sources within the agency have confirmed that the release alludes to India's largest two-wheeler maker. The department did carry out raids on some of Hero's senior officials' homes and offices earlier this month, previously confirmed by the company in its statement. At the time, Hero MotoCorp did say it was cooperating with the agencies to the fullest. carandbike has reached out to Hero MotoCorp for a follow-up statement, but has yet to receive an official statement.

Also Read: Hero MotoCorp Denies Reports Of 'Bogus Expenses' Discovered By Tax Officials

Pawan Munjal's home and offices in Gurugram in Haryana, Delhi and some more cities were searched, earlier this month

In its statement, the I-T department said that it had conducted search and seizure operations at the automaker's offices, along with a company operating chartered flights and a real estate group of Delhi-NCR covering more than 35 premises on March 23, 2022. The release further states that the agency found various incriminating documents and digital evidence indicating expenses shown for business purposes but were not fully supported by evidence.

This includes expenditure aggregating to more than Rs. 800 crore that was booked in the guise of purchase of services from a specific event management entity. The I-T department alleges that this entity "siphoned-off the money by way of layering," which is an inadmissible expenditure under the Income Tax Act, 1961.

The 10 acres of farmland is reportedly a farmhouse in the Chattarpur area in Delhi, which included an unaccounted cash transaction of Rs. 60 crore

The search also found that 10 acres of farmland in Delhi that was purchased through a few paper companies and included an uncounted cash transaction of over Rs. 60 crore. Without naming anyone specifically, the release says the beneficiary of the transaction is a "prominent person of the automobile manufacturer group."

Also Read: Hero MotoCorp Made Bogus Expenses Of Over ₹ 1,000 Crore, Alleges IT Department

The agency also claims that the intermediary who facilitated the said deal admitted in his statement that a major part of the sale consideration was paid in cash. There's said to be other incriminating documents related to other real estate projects across Delhi where cash was received for the sale of units.

Furthermore, the release says that the company operating chartered flights booked bogus expenses and non-recognition of income totalling to over Rs. 50 crore. This also included rotation of funds and suspicious loans through a dubious NBFC, layering and re-routing of funds through paper companies and claiming bogus interest expenses.

Lastly, the press release states that undisclosed cash exceeding Rs. 1.35 crore was seized in the operation along with jewellery worth over Rs. 3 crore was kept under restraint. The investigation is currently in progress.