The Income Tax department raided the office of the manufacturer of popular drug Dolo-650, Micro Labs Limited, located in Bengaluru, on Wednesday. Dolo-650 tablet became a popular drug after its widespread use by Covid-19 patients over the last two years. The pharmaceutical company faces allegations of tax evasion.
The Income Tax Department seized cash and assets worth over Rs 8 crore in search and seizure operations carried out on a pharmacy group engaged in the business of manufacturing and distribution of pharmaceutical medicines and real estate development. The raid covered 25 premises of the group in Delhi-NCR and Haryana on Friday.
According to the Income Tax Department, the large number of seized incriminating documents and digital data from this group’s 25 premises revealed the involvement of huge unaccounted sales of pharmaceutical medicines in cash. The group has also been booking bogus Long Term/ Short Term Capital Losses in the securities market to offset the capital gains earned on such property transactions. The amount of such bogus losses is estimated to be around Rs. 20 crore.
A large number of purchases, payments of wages and other expenses were also found to have been made in cash. This modus-operandi of unaccounted cash sales of pharmaceutical medicines, including cash receipts through hawala for the sale of medicines to Afghanistan, has been admitted by a key person involved in such transactions.
The preliminary analysis of the seized data indicates that such hawala cash receipts amount to Rs. 25 crore approximately. In the case of one pharmaceutical concern dealing in Active Pharmaceutical Ingredients (API), surplus stock valued at Rs. 94 crore has been found. The search action has revealed that the group has also floated Benami entities to purchase immovable properties in the State of Himachal Pradesh.
The Income Tax Department further found that the cash generated through unaccounted cash sales has been invested in the purchase of immovable properties, and an expansion of manufacturing facilities for Pharmaceutical medicines. The real estate entities of the group are found to be engaged in out-of-books sales and the purchase of properties in cash.
Officials at the Income Tax department have said that it is now looking at pharma company’s financial documents, balance sheets and business distributor networks as part of their searches.
A team of more than 20 officers associated with the I-T dept conducted the raids on the Race Course Road office of the drug manufacturer. According to PTI, sources in the I-T department said that simultaneous raids were conducted at 40 locations by 200 officers across the country, including New Delhi, Sikkim, Punjab, Tamil Nadu and Goa. Sources said that the residences of Micro Labs CMD Dileep Surana and Director Anand Surana were also raided.