The Income Tax Department seized unaccounted cash of Rs. 1.80 crore and unexplained jewellery valued at Rs. 8.30 crore from Ahmedabad-based company Ratnamani Metals and Tubes. The I-T raid was initiated on Nov 23. The search action has led to the detection of total unaccounted transactions exceeding Rs. 500 crore. The search operation covered more than 30 premises in Ahmedabad and Mumbai.
During the course of the search operation, a large number of incriminating documents, loose sheets, digital evidence etc. have been found and seized. This evidence contains detailed records of the group’s unaccounted income on which due taxes have not been paid. The deleted WhatsApp chat of a key person, detected during the search, revealed evidence of obtaining huge accommodation entries by the group to reduce its taxable income. Certain benami properties have also been identified.
The company’s registered office is near Rajmukut society, Naranpura crossroads. The groups associated with Ratnamani: Monark Network and Astral Pipes are also under I-T radar.
Prakash Sanghvi is the chairman and managing director of Ratnamani Metals and Tubes company. The company was established in 1983. In 2020, the company had received an order worth Rs 216 crore for supply of carbon steel pipes in the domestic market. The firm’s manufacturing facilities are located at Chhatral and Indrad (near Ahmedabad) and Bhimasar (near Gandhidham, Kutch), in Gujarat.
Ratnamani Metals and Tubes is engaged in providing total piping solutions to a diverse range of industries. On a consolidated basis, the company posted a 26.1% rise in net profit to Rs 71.52 on a 23.4% surge in net sales to Rs 711.70 crore in Q2 FY22 over Q2 FY21.
Ratnamani Metals and Tubes skid 3.65% to Rs 2,052.65 after the firm intimated regarding the search operations conducted by the Income Tax (IT) Department at its registered office, corporate office, branch offices and plants from 23 to 27 November 2021.
Earlier the company, in its press statement, said that, “during the search operations company extended its full co-operation to the Income Tax officials and provided all the information/ documents, sought for. We do not foresee any material impact on the company’s current or future business operations. Further, as an organization, the company continues to conform to the highest standards of corporate governance, as demonstrated in the past.”
A preliminary analysis of evidence indicates that the group is indulging in unaccounted sales of goods and scrap in cash which is not recorded in the regular books of account. Further, incriminating evidence of various malpractices such as unaccounted cash loans advanced and interest earned thereon, expenses incurred in cash, bogus expenses and purchases, unaccounted land investments etc. has also been unearthed.
Further investigations are under progress.