The Income Tax Department on Wednesday searched several locations linked to a Bengaluru-based pharmaceutical firm and uncovered irregularities relating to tax evasion, recovering gold and diamond jewellery apart from cash of ₹1.2 crores, news agency reported.
The department scoured 36 locations of the company across nine states on July 6 and found substantial incriminating evidence in the form of documents and digital data, according to an official statement released by the Central Board of Direct Taxes.
The tax department’s officials have now reportedly seized unaccounted cash of up to ₹1.20 crore and gold and diamond jewellery worth more than ₹1.40 crore.
The company, which has not been named, is engaged in manufacturing pharmaceutical products and Active Pharmaceutical Ingredients (API), and has branches in over 50 countries.
Evidence collected against the firm suggests that tax was evaded using methods like accounting ‘unallowable’ expenses by distributing freebies to medical professionals under the head “Sales and Promotion”.
The group has been accused of spending around ₹1,000 crore in promoting its products unethically by giving out freebies in the form of travel expenses and gifts to doctors in the name of “Promotion and Propaganda”, “Seminars and Symposiums”, “Medical Advisories” etc.
Officials estimated the total amount of tax evaded by the company to be over ₹300 crore, for which it has used various fraudulent means including artificially inflated deductions and inadequate allocation of expenses.