Black money transactions totaling Rs 102 crores were uncovered in an income tax raid at a used car showroom in Kozhikode.
The fraud reportedly took place at Royal Drive, owned by Malappuram native Mujeeb Rahman. Allegedly, transactions involving several cine actors and sports stars through the showroom are now under scrutiny, with the Income Tax department serving notices to those involved.
Following a tip-off, income tax raids were conducted at Royal Drive showrooms in Kozhikode, Malappuram, and Ernakulam. It is alleged that individuals often sold their luxury cars to the company after using them for a while and received unaccounted money in return.
GST intelligence probes on 20 garment shops in Calicut had uncovered a Rs 27 Crore tax evasion scam through fake input tax credits, last year.
Shops owned by three individuals were targeted, with raids also conducted at partners’ residences. The fraud involved forging tax documents for goods bought outside Kerala. Joint Commissioner TA Ashokan led the raid, accusing traders of briefly detaining officials, a claim that the traders denied, citing a lack of prior notice.
An Indian Cricketer and several Actors from the film industry are also under the Income Tax Scanner now.
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In India, black money refers to income or wealth that is illegally earned, not declared for tax purposes, or generated through corrupt practices.
Penalties for black money transactions include hefty financial fines ranging from 100% to 300% of the tax evaded, imprisonment from months to years depending on the severity, confiscation of assets acquired with black money, restrictions on financial activities, and caused obvious reputational damage.
The Prevention of Money Laundering Act ( PMLA ) and the Income Tax Act regulate these penalties, to curb tax evasion, promote financial transparency, and deter the accumulation of illegal wealth.
The investigation is still ongoing.
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