Dr. Pawan Munjal, Chairman and Managing Director of Hero MotoCorp was raided by the Income Tax Department last week. The search and seizure operation started at multiple locations in Delhi-NCR on March 23 and lasted for more than three days till March 26. Now, in a startling revelation, the IT searches have figured out bogus expenses worth Rs 1000+ Crores by the firm. Furthermore, cash transactions of more than Rs 100 Crore were made in purchase of a farmhouse in Chattarpur, Delhi. This has led to shares of Hero MotoCorp dipping by nearly 8 percent.
The IT raids covered around 40 premises in Delhi-NCR related to Pawan Munjal and Hero MotoCorp. Sources close to the development have disclosed that huge incriminating evidence has been seized by the IT officials during the 3-day long operation in the form of hard copy documents and digital data. The evidence showed bogus purchases, huge unaccounted cash expenditures and accommodation entries which are to the tune of over Rs 1000 Crore. The Income Tax Department has further unearthed evidence of cash transactions of more than Rs 100 Crore which were used for buying a farm house in the outskirts of Delhi. It was noticed that Pawan Munjal had bought a farmhouse by manipulating its market price to save tax and used black money in cash for payments over Rs 100 Crore.
For those asking, as per section 269SS of Income Tax Act, if the seller accepts an amount of Rs 20,000 or bigger in cash from a buyer in the purchase of Immovable Property then 100 percent penalty is levied. Hence, the act of paying Rs 100+ Crore in cash for purchasing a farmhouse in Chattarpur was clearly a violation of section 269 SS of IT Act. The IT officials also conducted raids at the offices and residential premises of promoters of Hero MotoCorp, which included the office and residence of Pawan Munjal as well. The IT team recorded the statements of people present at these places while punchnama was done too. Hero MotoCorp had reportedly called it nothing more than a “routine check”.
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A mechanical engineering dropout by choice, Mayank has been in the auto journalism biz for the past 8 years. He is currently working as an Associate Editor at Droom Discovery and covering each and every aspect of the auto industry. He has worked with a plethora of renowned Auto brands in his illustrious career so far. Being a student of English Literature, his mantras of success are the Never-Say-Never attitude and self-confidence. Mayank likes to travel, read books and listen to music during his free time.
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