Mumbai: The Income-Tax department said on Sunday it has found evidence that a startup based in Pune and Thane has not disclosed Rs 224 crore of income. While the I-T department didn’t name the company, it is believed to be referring to Infra.Market, the construction materials startup that its officials raided last week.

It also said the company appeared to have booked bogus purchases, made huge unaccounted cash expenditures, and obtained accommodation entries totalling over Rs 400 crore. During the search operations, Rs 1 crore in unaccounted cash and jewellery worth Rs 22 lakh were also seized, the department said in a press statement.

When confronted with the evidence, directors of the group, “admitted under oath this modus operandi, disclosed additional income of more than Rs 224 crore in various assessment years, and offered to pay their due tax liability,” the department said.

On March 23,
tax officials searched the offices of Infra.Market in 23 locations, including Maharashtra, Karnataka, Andhra Pradesh, Uttar Pradesh and Madhya Pradesh. The company has a pan-India presence and an annual turnover of more than Rs. 6,000 crore.

The I-T department said it is investigating how the company obtained huge foreign funding via Mauritius by issuing shares at an “exorbitantly” high premium. These funds were routed through a hawala network involving shell companies in Mumbai and Thane, it said.

“These shell companies exist [only] on paper, and were created only for the purpose of providing accommodation entries. Preliminary analysis has revealed that the total quantum of accommodation entries provided by these shell entities exceeds Rs. 1,500 crore,” the department said.

In response to queries from ET, a spokesperson for Infra.Market said, “We continue to cooperate with the authorities and provide all necessary information to the department. Since the matter is sub judice, we would not like to comment further.”

The raids came at a time when Infra.Market was reportedly stitching together a funding round from new and existing investors, looking to raise close to $450 million at a valuation of more than $4 billion. Infra.Market entered the unicorn club in January 2021 when it raised $100 million in a round led by Tiger Global. It again raised $125 million from Tiger Global, catapulting its valuation to $2.5 billion.

Compliance and governance issues have cropped up at some well-funded startups in the recent past, including BharatPe, Paytm Payments Bank, and Trell.

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