Tax evasion of over Rs 1,350 cr: I-T raids power firms of Kamal Nath's kin

The action was taken on April 7 at multiple locations of MB Power, Hindustan Power Projects (HPP), Hindustan Cleanenergy, and Swift Powertech at Delhi-National Capital Region, Bhopal, Indore, and Goa

 The income-tax (I-T) department has conducted search-and-seizure operations at the companies of Madhya Pradesh Chief Minister Kamal Nath’s relatives. The tax authority has detected large-scale tax evasion of more than Rs 1,350 crore and seized unaccounted assets worth Rs 3 crore.

The action was taken on April 7 at multiple locations of MB Power (Madhya Pradesh), Hindustan Power Projects (HPP), Hindustan Cleanenergy, and Swift Powertech at Delhi-National Capital Region, Bhopal, Indore, and Goa, said an I-T source privy to the development.

During the search operation, tax sleuths also found evidence of over-invoicing of imports and round-tripping of Rs 252 crore.

When contacted, the spokesperson of HPP declined to comment over a phone call. He did not respond to an emailed query.

According to the Central Board of Direct Taxes (CBDT), during the searches, evidence was found indicating the group grossly over-invoiced its imports from original manufacturers by re-invoicing them through a shell company of a person who is an accused in a major defence scam. “The surplus so created was ploughed back into the books as foreign direct investment through another shell company of the same person,” the apex body said in a statement issued on Monday.

Ratul Puri is the chairman of HPP, which is a thermal power generating company. Hindustan Cleanenergy is the solar arm of the company and MB Power is a special purpose vehicle formed by HPP to execute 1,200 megawatt coal-based power project in Annupur, Madhya Pradesh. Ratul Puri did not respond to multiple calls and messages by Business Standard.

HPP was earlier known as Moser Baer Projects, founded by Deepak Puri, father of Ratul Puri. The company was engaged in manufacturing of solar panels and electronic storage items. It was rechristened in 2013 as HPP and had plans to invest Rs 32,000 crore in solar, thermal, and hydropower projects in three years.

Deepak Puri, chairman, Moser Baer, was recently questioned by the Enforcement Directorate in connection with the Rs 3,600-crore AgustaWestland money laundering case, along with his son. Deepak Puri is the brother-in-law of Kamal Nath, married to his sister Nita Puri.  

The CBDT further said that a maze of shell companies used as conduits for providing entries to the group was also detected. “Accommodation entries in the garb of bogus unsecured loans/share application money to the tune of Rs 370 crore have been found. Evidence of inflation of expenses through bogus billing to the tune of around Rs 330 crore has been detected in the case of a power plant of the said group. The money so siphoned off was collected in US dollars through hawala operators,” it said.

The I-T department also seized a handwritten diary containing records of cash receipts to the tune of Rs 240 crore from the office of the group. The entries therein have been admitted by the persons concerned.

Enquiries by taxmen also revealed that the group used the services of a Dubai-based operator to park unaccounted foreign remittances in overseas jurisdictions. Besides, an unaccounted payment of Rs 9 crore towards purchase of a property has also been identified by the tax department.

Earlier this month, the Election Commission had summoned Revenue Secretary A B Pandey and CBDT Chairman P C Mody after the Opposition complained about the searches of political opponents at the behest of the ruling party.