The Income Tax Department has said that the world’s biggest two-wheeler manufacturer – Hero MotoCorp has made over Rs 1,000 crore in bogus expenses. The department has also found multiple violations including Rs 100 crore in the transaction for a farmhouse in Delhi.
The new development comes after the Income Tax department detected a bogus expense done by the company. The I-T raids were conducted between March 23 and March 26 at the premises linked to Hero MotoCorp.
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ANI reports that the officials found “incriminating evidence” in the form of hard copies and digital data. The evidence collected reveals that the company has made bogus purchases, made massive unaccounted cash expenditures and obtained accommodation entries amounting to Rs 1,000 crore.
The report further claims that the I-T Department found evidence of cash transactions of more than Rs 100 crore in a purchase of a farmhouse on the outskirts of Delhi. Pawan Munjal, the bossman at Hero MotoCorp bought a farmhouse in Chhattarpur where the market price was manipulated to save tax. Munjal allegedly used Rs 100 crore from his black money stash to pay for the farmhouse. This is a violation of section 269 SS of the I-T Act.
Hero MotoCorp has denied charges
Hero MotoCorp has issued a statement and said that all the charges are baseless. According to Hero, officials from the Income Tax Department visited two of their offices in Delhi and Gurugram. The officials also visited the residence of Pawan Munjal, Chairman and CEO of Hero MotoCorp. The I-T Department informed the company that it is a routine inquiry. The statement also says that it is not uncommon before the financial year comes to an end.
Hero MotoCorp further says that it continues to be business as usual. “We at Hero MotoCorp are an ethical and law-abiding corporate, and maintain the highest standards of impeccable corporate governance. In keeping with this philosophy, we are extending our full cooperation to the authorities,” said the statement.
After the I-T Department revealed the fraud, the share price of the Hero MotoCorp tanked by more than 7% intraday.
“We are conscious of our obligation under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015; we have been discharging the same on a regular basis and shall continue to do the same. As a matter of fact, we do not comment/respond on speculative news,” said Hero MotoCorp in a statement.
Hero MotoCorp is the world’s largest two-wheeler manufacturer with 3,58,254 lakh units sold in the market in February this year. This is much lower than the 5,05,467 units sold in the same period last year. The drop in sales is due to supply chain issues. The brand is working to bring new electric vehicles to the Indian market.
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The post Hero MotoCorp MD used ‘Black Money’ to buy farmhouse: Income Tax Dept first appeared on Cartoq.
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