I-T identifies 1,155 shell cos used to launder Rs 13,300 crore

February 02, 2018 | -839.91 | Reason: Stricter tax rules for stock investments and the easing of fiscal deficit

The Income Tax department has identified 1,155 shell companies which were used as conduits to launder money amounting to Rs 13,300 crore during three years to March 2016, Parliament was informed today.

Minister of State for Finance Santosh Kumar Gangwar said investigations conducted by the I-T department have led to identification of number of entities which existed and operated only in form but not in substance.

These entities were used as conduits for non-genuine transactions such as bogus purchases, sales, expenses, long term capital gains in shares, layering of transactions.

"During last three financial years (2013-14 to 2015-16), investigations led to detection of more than 1,155 shell companies/entities which were used as conduits by over 22,000 beneficiaries. The amount involved in non-genuine transactions of such beneficiaries was more than Rs 13,300 crore," Gangwar said in a written reply to a question in the Rajya Sabha.

He said action against such entities as also against the beneficiaries of non-genuine transactions is a continuous process under the Direct Taxes law.

"Such action includes searches, surveys, enquiries, assessment of income, levy of taxes, penalties and filing of prosecution complaints in criminal courts, wherever applicable," Gangwar said.

The government in February had constituted a task force under the chairmanship of Revenue Secretary to monitor action against "deviant" shell companies.

Other members of the task force are from Department of Financial Services, CBDT, CBEC, CBI, Enforcement Directorate, SFIO and Financial Intelligence Unit.