Bhubaneswar: Income tax sleuths on Tuesday conducted simultaneous searches at multiple locations across the country in connection with an alleged Rs 100 crore scam involving two Odisha-based iron ore mining companies.
The simultaneous searches were conducted in Bhubaneswar, Cuttack, Rourkela, Joda and Koira in Odisha, Kolkata, Ghaziabad and Gurgaon at the offices of MGM Minerals Limited and SN Mohanty. The searches led to the seizure of Rs 2 crore and over 25 lockers. I-T officials said that the searches will continue for four to five more days to ascertain the alleged irregularities committed by the two companies.
A senior I-T officer said the searches were conducted based on the 2022 CAG report that named 22 mining companies which allegedly manipulated the grade of iron ore to evade tax. “The two mining companies allegedly manipulated the grade of iron ore to gain profit and evade tax. When the quality of the iron ore is downgraded, the companies pay less royalty and evade taxes,” he said.
He further said that they also found that the two companies are involved in hawala transactions. “More than cash, we are looking for documents to prove that the companies were involved in hawala transactions,” he added.
Sources said that so far documents related to re-routing of money through British Virgin Islands have been established. The money from this tax haven was used in acquiring the mines during the auction in 2020.
“The money was invested in a fake company in the British Virgin Islands by the companies and it was re-routed back to India and invested in the mining auction back in 2020. It is usually done to evade tax,” the officer explained.