The Income Tax department had received information about a large tax evasion case by two reputed companies in Uttar Pradesh. On basis of that information, they raided the companies under the Sultan Group of Companies which included Sultan Tanneries Private Limited, Sultan Overseas, and the Model Tanners Pvt. Ltd and Model Exims Pvt. Ltd. These companies were spread over 15 places in Kanpur and Unnao Districts of the state, where they had their tanneries and manufactured their leather goods. Asset value amounting to a massive figure of approximately Rs 70 crore was recovered from the raids.
These two companies had allegedly devised a plan of evading tax buy the help of floating shell companies and showing unjustified and inflated cost of raw materials. They also received the accusation of modifying their balance sheets, which showed large off the record and unsecured loans regarding their real sale.
The tax raiders had seized various proofs regarding their tax evasion. They were documents related to suspicious financial transactions, their sale of leather products which showed the absence of their tax payment, off the record investments in gold, properties and shares of various other companies.
According to the Income tax department, they had been closely monitoring the two companies for the last six months. A senior Income Tax official claimed that they had secured more than Rs 70 crore worth of asset gained by tax evasion. He is also confident about the fact the asset value might end up amounting to more than Rs 100 crore once they get access to their lockers and get hold of the documents within.