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IL&FS Rail used shell firms to create fake invoices: I-T

The tax department has allegedly recognised multiple contracts that IL&FS Rail awarded to shell companies, obtaining false invoices for “non-existent” work to lessen its profits
New Delhi: IL&FS Rail Ltd, an IL&FS Transportation Networks Ltd subsidiary, has used accommodation entries from “shell companies” to procure false expenses worth crores of rupees for “non-existent” infrastructure work, an investigation by the Income Tax department has alleged. The tax department has allegedly recognised multiple contracts that the firm awarded to shell companies, obtaining false invoices for “non-existent” work to lessen its profits. IL&FS Group’s official spokesperson has refused to comment on the case.

“Bogus invoices” of over Rs 20 crore

IL&FS Rail obtained “bogus invoices” of more than Rs 20 crore in 2013-14 from Silverpoint Infratech Ltd, a Kolkata-based firm allegedly “involved in facilitating accommodation entries to beneficiaries in the garb of bogus work contract expenses/ unsecured loan entry/ share capital” for a 0.50 percent commission, the IT probe has found. Even though Silverpoint had “an income of Rs 251 crore, it did not have the business premises to carry out its operations,” said the I-T department, adding that the firm did not have enough manpower or infrastructure to finish any contractual work. In a statement under oath to the tax department, I-T managing director of Silverpoint has accepted that his firm was involved in providing accommodation entries for a commission. IL&FS Rail, however, has filed an appeal, according to sources.    The tax investigation has also sought information from IL&FS Rail on contracts of more than Rs 20 crore allotted to Divyanshi Infra Projects Ltd, NKG Infrastructure Ltd and Suryamukhi Projects Pvt Ltd — which are accommodation entry providers, the department has alleged.