Polycab India Share News : Price crashes 20% after IT Department Unearths Unaccounted Cash Sales

Polycab India stock price crashed 20 percent in the morning session on January 11, 2024, after the income tax department said it unearthed unaccounted cash sales.

On January 10, 2024, the income tax department unearthed “unaccounted cash sales” of about Rs 1,000 crore. This comes after the It department searched the company’s offices.

The Central Board of Direct Taxes (CBDT) stated on January 11 that credible evidence recovered during the search established that the flagship company had made unaccounted cash sales of around Rs 1,000 crore. The company did not record these transactions in its books of accounts. CBDT, the administrative body for the income tax department, made this announcement.

The income tax department conducted searches at Polycab’s premises on January 10. It covered 50 locations of the company in Mumbai, Pune, Aurangabad, Nashik in Maharashtra, Daman, Halol in Gujarat, and Delhi.

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The searches also included authorized distributors of the group, as noted by the CBDT.

The CBDT statement did not explicitly name the group, official sources confirmed. According to PTI, the name of the company is Polycab India.

The CBDT statement exposed that a distributor, representing the company, made unaccounted cash payments exceeding Rs 400 crore for procuring raw materials.

The investigation also alleges the discovery of “non-genuine” expenses worth around Rs 100 crore. It encompasses sub-contracting expenses, purchases, and transport expenses, among others, based on seized evidence from Polycab’s premises.

The authorized distributor, as per the CBDT, was further stated to have enabled certain parties to artificially inflate their purchase accounts. It resulted in an approximate amount of Rs 500 crore. Notably, this distributor exclusively deals in products from the flagship company.

However, Polycab India in a BSE filing denied the tax evasion allegations.

“The Company asserts its commitment to compliance and transparency, having fully cooperated with the Income Tax Department officials during the search proceedings in Dec ’23. The Company has not received any communication from the Income-tax department regarding the outcome of the search,” the company said.

“Polycab India remains focused on its mission to provide quality products and services to its customers while upholding the principles of corporate governance and ethical business practices,” it added.

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