The Income Tax Department has uncovered unaccounted cash sales of approximately Rs 1,000 crore following search and seizure operations against the Polycab Group. According to sources, the company engaged in undisclosed cash sales, cash payments for unaccounted purchases, non-genuine transport and sub-contracting expenses to suppress its taxable income. Evidence of unaccounted cash payments of over Rs 400 crore made by a distributor on behalf of the flagship company has also been seized. The Finance Ministry issued a statement revealing these findings.
In light of these developments, the stock of Polycab India Ltd (NS: POLC) has witnessed a significant decline, down by 27% this week and currently locked in at a massive 20% lower circuit to INR 3,929.5. The volume for the week has already reached 8.8 million shares, the highest since July last year.
The Central Board of Direct Taxes (CBDT) disclosed that during the raid on December 22, 2023, over INR 4 crore in unaccounted cash was seized, and more than 25 bank lockers were restrained. The Polycab Group, a prominent player in wires, cables, and electrical items manufacturing, now faces scrutiny following these revelations. This event has sparked significant market interest and has prompted stakeholders to closely monitor the situation.
The incident underscores the importance of transparent financial practices and compliance with tax regulations for businesses. The implications of such scrutiny have reverberations not only in the financial market but also in the wider business community. As developments unfold, the Polycab Group will continue to be under close observation as stakeholders await further details and potential actions in response to these findings.
