The Investigation wing of Income Tax Department conducted searches on various persons and entities in the Cinema Industry. The search was initiated on 3 January and went on till Friday.
The Search operation was conducted at 21 premises and surveys at 5 places. For this operation nearly 180 Officers and officials were mobilised from various places in Karnataka and Goa region. The Department conducted discreet enquiries for more than three months before the search and identified the modus operandi and the key players.
The Search action covered Film production Companies, Film Producers, Film Financiers and Actors. The Searches have been successful in unearthing evidences of suppression of income from film production distribution and exhibition as well as evidence of unaccounted cash expenditure in film. In particular evidence of unaccounted theatre collections in cash and consequential evasion of taxes have been found.
Evidence of unaccounted professional receipts by Artists, Cash investments in properties and jewellery through unaccounted income have been found. Evidence has also been found of suppression of income from sale of audio, digital and satellite rights, unaccounted cash receipts from distributors, and of expenses from undisclosed and unaccounted sources.
The searches resulted in seizure of undisclosed assets valued at Rs. 11 Crores including cash of 2.85 Cr and Gold Jewellery of 25.3 kg. Incriminating evidences found when put across to the persons involved resulted in admission of unaccounted income of about Rs. 109 Crores. There are many issues on which evidence has been found but no admission has been made: the detection of concealed income will be a much higher figure.
Some of the evidence found like diversion of cash collected by theatres will be of interest to other revenue and enforcement agencies and will be duly shared with them. In accordance with the normal process of the Investigation Wing will be launching some prosecution cases for tax evasion at a very early date.
The Income Tax department requests the Entertainment industry in Karnataka to follow laid down accounting standards by recording all transactions in books of accounts and pay due taxes.
